Norfolk County Council secures settlement as Apple agrees £384m lawsuit payment

15 March 2024, 20:04

Apple logo in window of store
Apple quarterly profits. Picture: PA

The claim alleged Apple’s chief executive Tim Cook misled investors about iPhone sales in China between November 2018 and January the following year.

Norfolk County Council has secured a settlement in a lawsuit against Apple, with the tech giant agreeing to pay 490 million dollars (£384 million) in a “tremendous result”.

The lawsuit alleged Apple’s chief executive Tim Cook misled investors about iPhone sales in China between November 2018 and January the following year.

The preliminary settlement filed in the US District Court in Oakland, northern California, will need final approval from a judge at a further hearing.

The class action – made on behalf of a group of claimants including investors in Apple – was led by Norfolk Council, which said its pension fund was affected by the company’s alleged actions.

Tim Cook
Tim Cook is alleged to have misled investors (Doug Peters/PA)

A spokesperson for the Norfolk Pension Fund said: “We are proud of this recovery for investors.

“We are mindful that we are stewards of pensions relied upon by thousands of families and individuals.

“When and where it’s warranted, we will take decisive action to recover losses when our participants’ investments are harmed by fraud.”

The Oakland court’s judgment said: “The settlement is a tremendous result for the class.”

According to the document, Norfolk Council became the “lead plaintiff” in June 2020 and alleged that Apple “made materially false and misleading statements and omissions about demand for the newly-released iPhones and Apple’s business in China” contrary to the Securities Exchange Act 1934.

The complaint further alleged “false and misleading statements and omissions” caused Apple’s stock to trade at “artificially inflated prices” before the stock price declined when the “true facts” were disclosed.

Mr Cook indicated during an investor conference call in November 2018 that iPhone sales in China were performing well, according to the complaint.

In January the following year, the chief executive warned Apple’s revenue for the quarter would drop nine billion dollars (£7.09 billion) below what was predicted – with almost all of the fall found to be down to poor demand in China.

It led to the company’s stock price diving 10% in the next day of frenetic trading and cut shareholder wealth by more than 70 billion dollars (£55 billion).

Apple denied Mr Cook deceived investors about the phone’s sales in China in that period.

“Defendants (Apple) have expressly denied and continue to deny that they have violated the federal securities laws or any other laws, or have otherwise misled investors as alleged in this action,” the Oakland judgment made clear.

“But in recognition that further litigation will be protracted, overly burdensome, expensive and distracting have determined that it is desirable and beneficial for them to resolve the action.”

The parties accepted a mediator’s proposal to settle on March 1.

Norfolk Council will receive a portion of the settlement.

Apple recorded 97 billion dollars (£76 billion) in profit in its last fiscal year. The 490 million-dollar payment is less than 1% of that figure.

Apple has been approached for comment.

By Press Association

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