Apple (AAPL) settled a class-action lawsuit earlier this year, alleging that the tech company misled or failed to disclose information to investors. As the deadline approaches for shareholders to make a claim for compensation, here's what you need to know about the case.
The lawsuit alleged that between 2 November 2018 and 2 January 2019, Apple made "materially false and misleading statements and/or failed to disclose adverse information regarding Apple's business and prospects", according to an email sent to shareholders earlier this year.
Allegations included the failure to disclose that the "US-China trade war had negatively impacted demand for iPhones and Apple's pricing power in greater China".
The litigation also claimed that Apple had not informed investors of the impact of reducing the cost of replacement batteries to "make up for the company's prior conduct of intentionally degrading the performance of the batteries in older iPhones". It said Apple then failed to tell investors at the time that the resulting rate at which customers were replacing batteries in their older iPhones, rather than purchasing new models was "negatively impacting" sales growth.
Read more: The top stock sectors to watch for the rest of 2024
It was also claimed that Apple failed to inform investors that it had "slashed production orders" from suppliers for the 2018 iPhone models and "cut prices to reduce inventory" as a result of slowing demand.
The lawsuit said that Apple's "decision to withhold unit sales for iPhones and other hardware, which was a metric relevant to investors and their view of the company's financial performance, was designed to and would mask declines in unit sales of the company's flagship product".
The shareholder lawsuit stemmed from Apple's warning on 2 January 2019 that its quarterly revenue would be $9bn lower than forecast, citing US-China trade tensions. This marked the first time Apple had cut revenue guidance since 2007, when the iPhone was released.
This update came after Apple CEO Tim Cook had told investors on a fourth-quarter results call on 1 November 2018 that while the business faced pressure in certain markets, he "would not put China in that category".
Who can claim compensation
The lead plaintiff on the case was Norfolk County Council, as it said its pension fund was impacted by Apple's alleged actions.
Apple reached a settlement on the lawsuit in March, agreeing to pay out $490m (£369m), part of which will go to Norfolk council.
A spokesperson for the Norfolk pension fund said they were "proud of this recovery for investors".
Shawn Williams, a partner Robbins Geller Rudman & Dowd LLP which represented investors, said the settlement was an "outstanding result".
When is the deadline?
An email was sent to a group of shareholders in July saying they had until Friday 4 October 2024 to submit a claim for compensation. This covers investors who held shares in the company in those two months leading up to the revised revenue guidance.
More details of the litigation can be found via this link to the 2019 Apple Securities Settlement website. Those wishing to make claim need to do so using the form on this link and then submit it online or send to the address detailed on the form.
Read more: Pound, gold and oil prices in focus: commodity and currency check
In a confirmation email in response to submitting the form, Apple said: "Claims processing in settlements such as this can take an average of nine months to a year before distribution is approved, and in some instances there may be additional delays due to appeals or other issues."
Shares in Apple, the world's most valuable company, have faced pressure more recently amid concerns of softer demand for its latest iPhone 16 model. The shares fell 3% in Tuesday's session, after Barclays' research observed indicators of weaker demand for the phone, which was launched last month.
However, year-to-date the stock is still up 17%, with a market capitalisation of $3.43tn.
A spokesperson for Apple had not responded to Yahoo Finance UK's request for comment at the time of writing.
Download the Yahoo Finance app, available for Apple and Android.