OAKLAND, California – Apple reached a US$490 million settlement of a class-action lawsuit brought by a group of investors who accused chief executive officer Tim Cook of misleading them in 2018 about the company’s sales prospects.

Mr Cook made false statements about the company’s business in China that caused Apple stock to trade at artificially inflated prices, the investors said in their complaint, which alleged violation of securities laws. Lawyers disclosed the proposed settlement in a request for judicial approval filed on March 15 in federal court in Oakland, California. 

The settlement comes as Apple continues to face headwinds in China, where iPhone sales fell by a surprising 24 per cent over the first six weeks of this year, according to independent research released earlier this month. Attorneys for the investors described the settlement as the third-largest securities class-action recovery in the district’s history.

Apple denied any violation of law, but said in the filing it agreed to the settlement “in recognition that further litigation will be protracted, overly burdensome, expensive, and distracting”.

Apple shares were down 1.1 per cent on Friday amid a broader pullback in the stock market. BLOOMBERG