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Apple sued over share dealings – again
Class Action No. 4
A fourth set of lawyers seeking irate shareholders has crept out the woodwork to sue Apple for allegedly misleading investors.
Law firm Cauley Geller Bowman & Coates this week filed a financial misrepresentation suit against Apple in Washington, following similar suits from Schiffrin & Barroway, Charles Piven and Milberg Weiss.
All four class-actions accuse Apple of over-egging its Power Mac G4, Cube and iMac puddings by over-optimistic claims on sales and performance.
As evidence of Apple's alleged misrepresentation, the suits cite the example of four company executives who sold a shedload of AAPL shares soon after said machines were announced in July 2000 and Apple's stock was changing hands for up to $64 a pop. They made a total of $22 million on the sale.
However, after Apple announced that Q3 2000 sales were well below expectations, its share-price fell to around $13, leaving investors who had bought stock on or after 19 July with significant losses.
Apple - like all other publicly listed companies - issues caveats to cover itself against such accusations, though this time it won't be helped by the apparently advantageous executive share sales. The implication made by the lawsuits is clear: that the executives knew that sales wouldn't meet expectations, a fact that would harm the company's share price, and were selling shares while they could. ®