Apple has been hit with a class action lawsuit that accuses the iPhone maker of securities fraud for making false statements and failing to disclose adverse information regarding its business prospects. The lawsuit alleges Apple’s actions led to their stock price being artificially inflated.
The suit also claims Apple was not initially forthcoming about a drop in demand for the iPhone, mostly due to poor sales of the device in China and the 2018 battery replacement program. Both combined to lead to lower than expected sales of the device during Q1 2019.
The lawsuit, filed by the City of Roseville employees’ retirement fund, aims to recover damages on behalf of those that purchased Apple stock between November 2, 2018 and January 2, 2019. Tim Cook and Luca Maestri are both named as defendants.
The plaintiffs also accuse the Cupertino firm of not disclosing that production orders from suppliers had been cut and that prices had been reduced.
When Apple did reveal the drop in iPhone sales on January 2, 2019, after the close of trading, and announced it would not meet its quarterly revenue forecast, the company’s stock fell $15 per share from $157.92 on January 2 to $142.19 per share on January 3.
The lawsuit claims Apple was aware that its iPhone sales were sliding for months before they publicly shared the information.