Apple, the iPhone maker is now under the wrath. This is because of allegations put against it. A lawsuit has been filed against the company. This suit claims that the officials of the company have presented false financial statements. Therefore, they have presented a rosy picture of the company. Moreover, this has led to a revenue guidance correction. This correction took place in January.
Apple accused of presenting false financial statements: what is it all about?
The legal suit has been filed in the District Court of United States. This is for the Northern District of California. The case is filed by the Retirement System of the City of Roseville.
Moreover, it is on behalf of Apple stockholders. The case aims to seek redress. This is for the violation of the federal securities law that is done by Apple.
In the case, the listed defendants are Tim Crook, the CEO and Luca Maetri, the CFO. These two are alleged for presenting the false financial statements.
The false statements are regarding the sales of their prime product, iPhones. Moreover, it also includes the earnings forecast and performance of the company. This performance is particularly in the market of China.
Because of this misleading by the company, its stock prices were inflated. Moreover, this also led to losses for the company. This is because the share prices of the company fell. It happened after the release of revision in January.
It is the period after the earnings for the fourth fiscal quarter was announced by the company. The allegations claim that the CEO and CFO claimed a record-breaking performance.
This is specifically for the holiday quarter. This performance was supposed to be in the range of $89 billion and $93 billion.
Moreover, the company also said that the two latest models of then iPhone XR and XS have had a great start. However, there was no reporting in the slowdown of the replacements.
This replacement program is catalyzed by the battery replacement. Moreover, under this program, the company replaced about 11 million batteries of iPhone. This number is 9 million more than the expectations.
In the false financial statements, the cuts in the production orders were also not reported. This was because of the slowdown in the demand of the iPhone. The demand in the market of China is not reported properly in false statements.
Moreover, the tensions in the sale because of the trade war between the U.S and China is not properly reported. The CEO had said that they were facing pressure only from the emerging markets. And things were much better in China. In fact, they claimed a growth rate of 16 percent.
We will have to wait to see the consequences of this lawsuit. For more updates, please stay tuned to Hiptoro.