Apple Inc. (NASDAQ:AAPL) Faces a Serious Issue

Apple Inc. (NASDAQ:AAPL) Faces a Serious Issue

Apple Inc. (NASDAQ:AAPL) Faces a Serious Issue

The US government has reportedly opened up an investigation into tech giant Apple amid a torrent of lawsuits alleging the company used an iPhone update to intentionally slow down older models.

According to Bloomberg News, citing sources with knowledge of the matter, the US Department of Justice and the Securities and Exchange Commission have requested information from Apple as part of a probe into whether or not the company’s not-so-helpful update violated securities laws. The inquiry is still in its early stages, according to the sources.

While consumers and even foreign governments – French authorities launched an investigation of their own in early January – have cried foul over the company’s “planned obsolescence,” the US government probe will focus on whether Apple misled investors about the performance of older phones.

In a statement released on Tuesday, Apple confirmed that it had received questions from US government agencies and was in the process of responding to them.

Apple apologized for the year-old update in December, insisting that the company would “never do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades.”

However, the company’s admission that its so-called “update” had damaged the performance and battery life of older iPhone models triggered an avalanche of lawsuits from outraged consumers.

Aside from more than nine lawsuits underway in the United States, the company also faces legal battles in France, Russia and Israel.

A group of plaintiffs in Russia is reportedly planning to take Apple to court after the company admitted it had been reducing the processing speed of aging iPhones.

The first lawsuits from Russian consumers are set to be filed this week, according to consulting lawyers at National Legal Finance Group (NLF) and Lex Borealis, as quoted by Russian business daily Kommersant. NLF will reportedly cover the plaintiffs’ legal costs in return for a share of potential damages, while Lex Borealis will provide legal support.

NLF Group is currently consulting the first group of 10 complainants, according to the firm’s managing partner, Maksim Karpov. “[If there is] a successful legal precedent we will easily increase this number to several hundred,” he said.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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