Apple Agrees to Pay $490M to Settle Lawsuit Alleging That Tim Cook Defrauded Shareholders

[GrayFlannel]

What are you referring to exactly? If you can provide proof Apple knew sales were struggling in (and I don't mean an inaccurate forecast of future sales), I'd love to take a look at it and I'll admit I'm wrong.

Take a moment to read any of the articles.

For one, the earnings call was in November 2018 then in Jan 2019 they missed their revenue guidance by $9bn. There’s nothing unreasonable about claiming Cook overstated the China market and suing for US securities fraud. Apple denies it but sees a settlement is in their best interest…and it probably was.

 

[dannyyankou]

Take a moment to read any of the articles.

For one, the earnings call was in November 2018 then in Jan 2019 they missed their revenue guidance by $9bn. There’s nothing unreasonable about claiming Cook overstated the China market and suing for US securities fraud. Apple denies it but sees a settlement is in their best interest…and it probably was.

I did read the articles. In the earnings call, he was talking about the previous quarter in China, which was accurate. The issue was the future quarter. Saying he overstated implies the sales were x and he said they were y. Was it a crappy forecast? Maybe. But you can try to predict sales all you want, purchasers are going to act how they act.

I say it all the time, but when you get involved in the stock market, you have to accept some amount of risk. Sometimes you're going to win, sometimes you're going to lose. These people come off as a bunch of sore losers.

 

[HazeAndHahmahneez]

The Cook disappointment (no hate) derives from the fact that he has spent his entire tenure essentially riding the existing product wagon, with no substantial changes other than spec bumps. His one sole product was a boondoggle destined for dusty shelves. The iPhone and iPad OS has become past stale and almost embarrassing at this point. His product development team is a shambles. There's no vision, no creativity. The best that can be said of him is that he created shareholder value -- but only through a tired portfolio which only goes so far.

It's time for him to ride off into the sunset and for Apple to find a real visionary to take them forward...

you say, "his sole product was a boondoggle destiny for dusty shelves"...Vision Pro? what about watch, or was that started by Jobs?....

 

[Tailpike1153]

That's pretty damning if Apple is willing to settle for half a billion dollars.

Unfortunately, no. It is pretty scary when that settlement is less than a single % of Apple's value.

 

[GrayFlannel]

I did read the articles. In the earnings call, he was talking about the previous quarter in China, which was accurate. The issue was the future quarter.

I’m afraid you just don’t understand it.

On Nov 1, 2018 Cook made claims about the current state of the China market where he would not put them in the same category as other countries with ‘sales pressure’. Those claims caused Apple’s stock to trade higher.

On Jan 2, 2019, sixty-one days later, Apple revised their revenue to be $9b less than forecasted attributing almost all of it due to poor China demand. In the same two month time period Apple moved to stop additional production lines for the iPhone XR.

The claim is that Cook knowingly made false and misleading statements that artificially inflated their stock prices and when the true facts emerged the stock dropped in the range of 10%.

Apple denied any wrongdoing but decided to settle the case. That’s probably a wise decision.

 

[sjsharksfan12]

How much money is Apple hemorrhaging on average daily due to legal issues?

I was just thinking I would hate to be an accountant at apple. You would need to track the cash flow from all the lawsuits and court proceedings. That's like it's own separate company.

 

[citysnaps]

They have deified Jobs, so they have to demonize his replacement. It would have been the same no matter who was made CEO after their new god.

Spot on. Cracks me up. Long ago Jobs was very lucky to get a tour of Xerox PARC (Palo Alto Research Center) where he saw PARC's mouse-driven graphical computer user interface demonstrated in their lab. Which he then "borrowed" for the first Mac. Hat-tip also needs to go to SRI's (Stanford Research Institute) Doug Engelbart who inverted the computer mouse.

Sadly no credit is given to Cook who kept Apple's 150,000+ employees employed during the pandemic, while most other large tech companies (google, Meta, Salesforce, Amazon, Microsoft, Uber, Twitter, Tesla, Dell, Zoom, and on and on) had massive layoffs letting thousands of employees go.

 

[Realityck]

Sadly no credit is given to Cook who kept Apple's 150,000+ employees employed during the pandemic, while most other large tech companies (google, Meta, Salesforce, Amazon, Microsoft, Uber, Twitter, Tesla, Dell, Zoom, and on and on) had massive layoffs letting thousands of employees go.

Most forget this comparison, they forgot how tough it was during Covid. From Oct 2022. Its the basis for all those layoffs in 2023. Compare Apple to others. In China at this time they had the whole city shutdowns until Dec 1st. Took most of 2023 to normalize.

https://twitter.com/i/web/status/1585629696363929600

 

[AlexJaye]

Timmy defrauds regular people every day by still selling 256gb SDD space and 8gb RAM in his Macs.

 

[citysnaps]

Timmy defrauds regular people every day by still selling 256gb SDD space and 8gb RAM in his Macs.

Apple phones/computers are sold stating how much memory and storage is included in the device, for an advertised price.

If someone needs more memory or storage, that can be increased by simply paying more money.

How is that defrauding people? Be specific.

 

[robfoll]

These Class Actions are pure legalised crime put together by shark lawyers. Should be banned unless related to something that is actually important.

 

[robfoll]

Timmy defrauds regular people every day by still selling 256gb SDD space and 8gb RAM in his Macs.

What a ridiculous comment. I have had a couple of Airs with that spec and they are perfectly fine for everyday use. My wife now uses one happily. If you are doing video editing etc you should know enough to spec more of everything.

 

[d0sed0se]

It's pretty sad and ridiculous that the CEO of a major corporation can get away with defrauding shareholders and not be held responsible. I mean, none of that fine will be coming out of his pockets will it?

What is happening to this world?

Why are so many people defending him? Are any of you here even shareholders?!

 

[djphat2000]

There's no way Apple would have spent anywhere near a half billion in lawyers' fees on this case.

As any corporation would do, they evaluated the likely outcomes and decided that paying the half-billion dollar settlement was the least-expensive of those outcomes.

Lawyers are no joke. 😂

 

[CarAnalogy]

This explains why they don't issue guidance anymore.

 

[GrayFlannel]

These Class Actions are pure legalised crime put together by shark lawyers. Should be banned unless related to something that is actually important.

If the action was frivolous the judge would have dismissed it.

 

[Abazigal]

It's pretty sad and ridiculous that the CEO of a major corporation can get away with defrauding shareholders and not be held responsible. I mean, none of that fine will be coming out of his pockets will it?

What is happening to this world?

Why are so many people defending him? Are any of you here even shareholders?!

I would assume the people here would be happy to stick it to the shareholders any way they can.

 

[Beautyspin]

Its a multi-million dollar fine every other day for Apple it seems like. Doesn't make a dent.

We do not have to worry; they are yet to come. The EU has not yet completed the review of Apple's DMA proposal.

 

[ThomasJL]

He's not great but I also don't trust anyone to choose someone better. Steve Jobs was a special, once in a lifetime CEO. It's all downhill from here because the tech industry has been taken over by visionless grifters with no passion for making things people actually enjoy using



Isn't Phil the one responsible for the awful App Store shenanigans that are ruining relations with developers and making usability worse for EU customers?

If that's the case, my bet is he will probably be the one picked and also he'll be absolutely reviled because of his terrible style of dealing with people and lack of judgement on what's important and what's not important

Craig is OK but he's also the person responsible for Apple's declining software quality and overall poor management of balancing all the different software Apple has to juggle and keep updated. His philosophy seems to be "as long as it's just barely good enough, it's fine" with seemingly no concern for the software being exceptional or enjoyable to use

I don't know a single thing about Jeff so I have no opinion on him

I was looking at Apple's Leadership page and saw that John Ternus is responsible for Hardware. I've never heard his name before but that's the one area Apple is excelling in. Probably more than ever. If that's an indication of his management and vision, maybe he's the one who could do a good job replacing Tim



Apple will never be brave enough to hire the next Jobs. The only reason they did was because they had absolutely no other option. The next Jobs probably isn't even in Tech since it's become the de facto playground of greedy grifters. People forget that at the start of the tech industry, people actually believed they could make the world a better place using technology. Now when people say that i's just market spin to justify stealing from customers (like Facebook) and to mollify rubes

What an excellent post!

You are so right about Craig Federighi, especially how he has "seemingly no concern for the software being exceptional or enjoyable to use". I still remember how arrogant and smug he was when introducing iOS 7 and taking verbal shots at Scott Forstall's use of skeuomorphism in previous versions of iOS. Federighi fails to realize that the level of graphic artistry that went into the skeuomorphic design of iOS 6 made it exceptional in comparison to all other smartphone operating systems out there. Now, iOS has flat design which looks like Android, Windows, and all the other cookie-cutter flat design on the Internet. Federighi also fails to realize that one of the many benefits of skeuomophism is that it made software enjoyable to use.

You are also so right when you said, "Apple will never be brave enough to hire the next Jobs." Tim Cook proved that to be true when he actually fired the closest thing Apple had to the next Jobs: Scott Forstall. Forstall masterminded the Mac OS X GUI, the iPod GUI, the iPhone GUI (and thus by extension, the iPad GUI, too). Forstall's skeuomorphic graphics help make computing fun, and also provided visual cues that helped people not familiar with computers, such as many elderly people and children. They also had culture in the sense that there were many cultural references to popular objects. It had a playfulness to it.

 

[J.Dillinger]

Someone gathered the data to support that. Fascinating to read the “Tim this, Tim that” comments. It’s almost like no one understands how a business is run.

 

[Abazigal]

You are also so right when you said, "Apple will never be brave enough to hire the next Jobs."

It does beg the question - does Apple need the next Steve Jobs? Is there even place for one in the Apple of today?

 

[svish]

Good to know about this. A lot of this will be going as attorney fees.

 

[Velli]

I know lawyers aren't cheap but saying your paying 490 million dollars to avoid costs is a joke

I agree, but the joke is not on Apple. The joke is on the US legal system, which I am fortunate enough not to be born into.

Lawyers win again.

 

[Motorola68000]

That pales into insignificance compared to the statement: "Actually, 8GB on an M3 MacBook Pro is probably analogous to 16GB on other systems."

Expect a class action on that soon.

I just hope Apple doesn't keep digging holes, and then dig deeper thinking they will get out of them.

Then expect a class action from disgruntled customers claiming their 8Gb base machines are no longer fit for purpose within a couple of years.

I know some jump on the bandwagon of class actions, which no one should condone, but Apple certainly don't help avoid these situations.

As an an example of how some jump on class actions: My son along with many others worked on a well known US Cruise Ship as engineer, and one night a passenger had to be taken on shore by helicopter after a medical emergency.

The next day a few passengers asked what the noise was and some of the crew thought it mischievous to tell the passengers it was most of the staff finishing their shift, leaving the ship every night and they were transported back for the next shift...within days multiple passengers were threatening class action because of the noise of staff being transported twice a day by helicopter!

 

[karranz]

So he straight out lied. Show him the door.