Norfolk County Council sues Apple in class action
A case led by Norfolk County Council against Apple has been granted class-action status by a judge in California.
The Council claims a pension fund it runs lost money after Apple allegedly misled shareholders in 2018 about the performance of its business in China.
Judge Yvonne Gonzalez-Rogers' decision means Apple could face significantly larger damages if it loses.
The BBC has approached Apple for comment
Norfolk County Council is involved in the case because it runs the multi-billion pound Norfolk Pension Fund whose members include council employees, as well as workers from other public bodies.
Acting in its capacity as the administrator of the fund, and as the lead plaintiff in the case, the council is suing Apple, its chief executive Tim Cook and Luca Maestri, the firm's chief financial officer.
The legal action - which also includes a number of US pension funds - was launched in 2020 and has been vigorously contested by Apple.
Plans halted
According to court documents, the council alleges that in late 2018, the "defendants misrepresented the state of Apple's business in Greater China, the company's most important growth market at the time".
It is claimed that on a call with analysts and investors on 1 November 2018, Tim Cook was challenged about "deceleration" in emerging markets. While admitting "pressure" in some markets such as Turkey and Russia, the case alleges he declined to put China in that category.
It's alleged that Mr Cook instead said: "In relation to China specifically, I would not put China in that category", adding "iPhone, in particular, was very strong double-digit growth there".
Days later, on 5 November, reports emerged that Apple had told its top smartphone assemblers to "halt plans for additional production lines" for the recently released iPhone XR.
In January 2019, Apple pre-announced its first earnings shortfall in 15 years. In a letter to investors, Tim Cook cited "lower than anticipated iPhone revenue, primarily in Greater China".
Shares fell on the news "from a close of $157.92 per share on 2 January to a close of $142.19 per share on 3 January on unusually heavy trading volume", the case says.
The plaintiffs claim that Mr Cook's 2018 comments misled shareholders, resulting in financial losses, something Apple strongly contests.
According to the Telegraph Apple maintains that Mr Cook's comments "were statements of opinion, and thus protected".
Judge Gonzalez-Rogers granted in part a motion for class certification, meaning that the case can also include others who brought Apple stock during the period from 2 November 2018 to 2 January 2019, and suffered damages.
But she agreed with Apple that this should not include those holding Apple stock options.
