Apple Violated Securities Fraud By Hiding iPhone Sales Drop

According to a recent report, Apple has been accused of violating the Securities Exchange Act in the US due to its hiding iPhone sales drop in many markets, including in the Chinese market.

On April 16, the US District Court in Northern California received the lawsuit from the City of Roseville Employees’ Retirement System. The news was collected by the Mercury News – a morning daily newspaper in San Jose.

The lawsuit stated that in November last year, the iPhone sales of the tech company got hit; however, Apple didn’t reveal the truth to its investors. It came as no surprise that a lot of the investors have suffered from economic loss.

Also in the report, the lawsuit can be transformed into a class action with a series of plaintiffs who purchased the company’s common stock from November 2, 2018, to January 2, 2019. In addition, the plaintiff is now looking for a trial by jury, as well as how to evaluate the unknown damages.

In November 2018, Apple said the company had been ready for the holiday season and drawn a perspective with the "strongest lineup of products and services ever." That finally turned out unreal.

What is the major reason for its iPhone sales drop? It is the trade war between the two superpowers in the world including the United States and China. Right on November 2018, the CEO of Apple Tim Cook, as well as his company, has detected the “true state” of the iPhone sales. However, until January 2019, the real iPhone sales in the first quarter was revealed.

According to the lawsuit, both Apple and its CEO made "materially false and misleading statements" to prop up the stock that kept being traded “at artificially inflated prices.”

Until January 2019, the company drops the revenue guidance for the first quarter of the financial year 2019 (that will end on December 29).

Tim Cook wrote a letter to Apple’s investors and suggested that the new revenue would be about $84 billion, reducing from $89-$93 billion compared to the initial revenue.

The Apple CEO didn’t deny that the trade war between the US and China caused the revenue drop. In addition, China’s economic slowdown was another factor to impact the company’s revenue.

The lawsuit pointed out that, as a result, the stock price of Apple dropped by over $15 each share, equivalent to over 9%.