Norfolk County Council Wins $490m Payout From Apple

Norfolk County Council has won a $490 million (£385m) payout from Apple over a class-action lawsuit that claimed the firm had covered up weak demand for iPhones in China.

The council, which administers the £4.9bn Norfolk Pension Fund, led a class-action lawsuit in northern California on behalf of shareholders who said they were affected by Apple’s actions.

Apple has agreed to settle the case, which was due to come to trial later this year, without admitting fault, the council said.

The firm had challenged the case for five years amidst the release of internal Apple emails and the questioning of company executives.

China demand

The lawsuit claimed chief executive Tim Cook failed to disclose weaker demand for iPhones in China ahead of a dramatic profit warning in January 2019 that saw $55bn wiped off Apple’s stock price.

On 1 November 2018, two months before the profit warning, Cook told investors Apple was “seeing pressure” in some emerging markets but that “I would not put China in that category”.

Within that two-month period reports said Apple had told its principal smartphone assemblers to halt plans for additional production lines for the recently released iPhone XR, the lawsuit said.

The lawsuit was originally filed by the US city of Roseville and Norfolk council took over as lead plaintiff in 2020.

‘Proud’

If the settlement is approved by a judge, the funds are to be distributed amongst plaintiffs who bought shares between November 2018 and January 2019, and it is unclear how much the council itself will receive.

Lawyers are due to receive up to 25 percent of the payout, which amounts to just under two days’ worth of profit for Apple, which reported $97bn in profits in its most recent fiscal year.

“We are proud of this recovery for investors,” Norfolk County Council said. “We are mindful that we are stewards of pensions relied upon by thousands of families and individuals. When and where it’s warranted, we will take decisive action to recover losses when our participants’ investments are harmed by fraud.”