County council agrees $490m settlement with Apple
Norfolk County Council's Pension Fund has negotiated and agreed to a proposed $490m (around £385m) recovery on behalf of a number of shareholders in an American class action lawsuit against technology giant Apple.
The Norfolk Pension Fund, which was the lead plaintiff in the case, claimed that Apple CEO Tim Cook made false and misleading statements to investors during a two-month period at the end of 2018.
Cook had told investors that deteriorating economic conditions in China did not impact Apple, but the company later issued a profit warning and blamed weakness in China for the dip.
News of the shortfall, which was around $9bn, caused the market price of Apple stock to plunge more than 9%.
Litigation was brought in 2019 in US federal court in Oakland, California, and in 2020, Norfolk was appointed as lead plaintiff.
According to Norfolk County Council, the pension fund went on to defeat the defendant's motion to dismiss, obtained class certification and defeated the defendant's motion for summary judgment.
Discovery and depositions took place both in the US and in the UK, and the case was resolved shortly before the trial was scheduled to commence in California.
Apple and its executives admitted no wrongdoing as part of the settlement agreement.
The case is pending approval before US District Judge Yvonne Gonzalez Rogers of the Northern District of California.
If the settlement is approved, it will be the third-largest securities class action recovery ever in the US District Court for the Northern District of California, which is one of the US's top courts for business disputes.
It will also be the fifth largest such recovery ever in the Ninth Circuit, the largest US judicial district.
Mark Solomon, Partner at Robbins Geller Rudman & Dowd, lead counsel for the Norfolk Pension Fund, said the $490m recovery, which will be shared among all injured investors, was "a historic result for a UK fund leading shareholder litigation in the US".
In US class actions, once a settlement is reached, it is down to members of the class to make their claim before a cut-off time.
The settlement per share is calculated after the cut-off when the number of claimants is known.
The amount Norfolk will recover is not yet known.
A council spokesperson said there is no other formal involvement of other LGPS funds, although they will be able to make their own individual claims if they traded Apple shares during the period at the centre of the litigation.
A Norfolk Pension Fund Spokesperson said: "We are proud of this recovery for investors. 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."
Apple has been approached for comment.
Adam Carey
