Apple Hit With Securities Fraud Lawsuit for Hiding iPhone Sales Drop

Discussion in ' News Discussion' started by MacRumors, Apr 17, 2019.

  1. MacRumors macrumors bot


    Apr 12, 2001

    Apple is facing a class action lawsuit accusing the company of securities fraud for making false statements and failing to disclose adverse information regarding its business prospects. These actions allegedly led to an artificially inflated stock price.

    Specifically, the lawsuit claims that Apple was not initially forthcoming about a drop in demand for the iPhone due to poor sales in China and the 2018 battery replacement program, both of which contributed to lower than expected iPhone sales in the first fiscal quarter of 2019.


    Apple is also accused of hiding the fact that production orders from suppliers had been slashed and prices had been cut, Apple's decision not to provide unit sales for iPhones and other hardware is also cited as a method Apple used to cause stock prices to rise to $209 per share.

    When Apple did reveal the dip in iPhone sales and announced that it would not make its quarterly revenue forecast, Apple's stock fell $15 per share from $157.92 on January 2 to $142.19 per share on January 3. According to the lawsuit, Apple knew its iPhone sales weren't on track months before the information was shared.

    The lawsuit, filed by the City of Roseville employees' retirement fund, is aiming to recover damages on behalf of people who purchased Apple stock between November 2, 2018 and January 2, 2019. Tim Cook and Luca Maestri are both named as defendants.

    Update: A second law firm has filed a class action lawsuit against Apple, which is essentially identical to the first lawsuit. It also accuses Apple of securities fraud for concealing the iPhone's decline in sales.

    Article Link: Apple Hit With Securities Fraud Lawsuit for Hiding iPhone Sales Drop
  2. DotCom2 macrumors 68040

    Feb 22, 2009
  3. thadoggfather macrumors G4


    Oct 1, 2007
    The fish rots from its head: Tim Crook

    Really don't like what the guys been doing over the years, stalling consumer technology progress.

  4. ryanwarsaw macrumors 68020


    Apr 7, 2007
    Some people sold their stock too low and now comes the crying.
  5. tito2020 macrumors 6502a

    Oct 16, 2011
  6. oghowie macrumors 6502a


    Jul 12, 2008
    These lawsuits are so dumb.

    What if I told you Apple stock is back at $200 now?
  7. Baymowe335 macrumors 601

    Oct 6, 2017
    Looks like the market is devastated with AAPL up 2% today and marching higher again.

    People get mad when then sell stock too low.

    They didn’t “hide” anything. They told investors they would no longer report unit sales in 2019, which is their choice. You could sell if you thought that ruined the company (lol).

    Tons of public companies don’t report metrics investors might like to know. Ever look at Google’s financials? Impossible to understand. No Pixel sales. Microsoft doesn’t report unit sales for their hardware and Samsung doesn’t even report Galaxy unit sales.
  8. Tivoli_ macrumors member

    Dec 14, 2017
    Is this unique to Apple? Are other companies who make smartphones required to give those same sales details?
  9. BruiserBear macrumors 6502a

    Jul 24, 2008
    No one forced anyone to sell at that lower price. Ridiculous lawsuit that I hope gets thrown out.
  10. rizzo41999 macrumors 6502


    May 27, 2009
    No matter. Small and will be covered by insurance.
  11. codydale macrumors member


    Jun 2, 2014
    MacRumors statistics: 80% chance of a new article being about an upcoming, ongoing, or previous litigation. The remaining 20% is primarily how Apple is doing poorly with x, y, and z.
  12. sw1tcher macrumors 68000


    Jan 6, 2004
    People who purchased Apple stock on or after Nov. 12, 2018 and still own it are in the money, so there's no damages. :D
    --- Post Merged, Apr 17, 2019 ---
    Tim Cook single-handedly "stalling consumer technology progress."

  13. thadoggfather macrumors G4


    Oct 1, 2007
    --- Post Merged, Apr 17, 2019 ---
    People always attribute Apple's successes 'single handedly' to Tim. But the reverse isn't allowed I guess, huh?

    I don't understand the thin skin mentality over only the biggest corporation in the world. Never have never will.
  14. Bin Cook macrumors regular

    Jun 16, 2018
    He is scum and a charlatan.
  15. gavroche macrumors 65816


    Oct 25, 2007
    Left Coast
    Perhaps he just thought it funny and inaccurate that one CEO, of one company, could be "stalling consumer technology progress" in general.
  16. Cosmosent macrumors 6502a


    Apr 20, 2016
    La Jolla, CA
    AAPL's Upper Mgmt knew by the end of the first weekend of XR sales ! ... late Oct 2018.

    Make NO mistake about that.

    The Drop in Unit Sales has very little to do with China OR the Battery Replacement program ... that's just AAPL's spin on the problem ... Cook's goal is ALWAYS just to present some "plausible" explanation.

    The real problem is that AAPL moved their iPhone product line so Upscale.

    Common Sense will ALWAYS prevail when assessing AAPL !

    AAPL's Upper Mgmt gets away with what it promotes simply because there are a sufficient number of Investors "who (simply) buy into the Hype" ! ... hook, line, & sinker (buy in) !

    The drop in Unit Sales was obvious ... & one iOS app had it right ALL along ! ... many months BEFORE it became public.
  17. thadoggfather, Apr 17, 2019
    Last edited: Apr 17, 2019

    thadoggfather macrumors G4


    Oct 1, 2007
    So you think its totally beyond belief that the head of the company makes key decisions in determining the road map of its core product lines? hot take

    That makes me think of Office Space immediately

  18. cmaier macrumors G5

    Jul 25, 2007
    He’s a great philanthropic law-abiding citizen who has done more for the world than almost anyone posting here.
  19. techwhiz macrumors 6502a

    Feb 22, 2010
    Northern Ca.

    I'm a share holder (still, did not sell) and I find these lawsuits BS.
    A company is not going to tell every financial decision or issue in real time.

    The information is shared in calls and quarterly statements and disclosure.
    Get over it and move on.

    Once again, I hold Apple stock.
  20. s15119 macrumors 68000


    Nov 20, 2010
    And they wonder why people hate lawyers. Idiocy. This will fail.
  21. Marcus PM macrumors regular

    Marcus PM

    Aug 9, 2011
    If the stock market were guaranteed, we'd all be millionaires.
  22. s15119 macrumors 68000


    Nov 20, 2010

    Now that's funny.
  23. agsystems macrumors 6502a

    Aug 1, 2013
    "the lawsuit claims that Apple was not initially forthcoming about a drop in demand for the iPhone due to poor sales in China and the 2018 battery replacement program"

    I don't know the merits of the suit but Apple has one of the best just-in-time supply managers in the business and they would have definitely know they were not going to hit the numbers they have guided
  24. keysofanxiety macrumors G3


    Nov 23, 2011
    Oh, so it's TIM'S fault that nobody else can do proper face recognition on phones? This advert makes a little more sense now.

  25. brofkand macrumors 6502

    Jun 11, 2006
    Companies are not required to break down revenue by product. Amazon has never released Kindle sales numbers, for example. And Apple has never reported AppleTV or Watch sales numbers, other than cumulative sales numbers every once in a while during keynotes.

    What is somewhat unprecedented is for a company like Apple to release sales figures for a decade and abruptly stop releasing the data, during the same quarter where they miss forecasts.

    The lawsuit has merit I think - Apple knew they would miss forecasts long before they announced it to investors, and investors have a mandate to have this information as soon as possible.

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