NEW YORK, March 26, 2022 /PRNewswire/ — Pomerantz LLP Announces Class Action Lawsuit Filed Against Telefonaktiebolaget LM Ericsson (“Ericsson” or the “Company”) ERIC and some of its officers. The class action, filed in United States District Court for the Eastern District of new Yorkand registered under 22-cv-01167, is on behalf of a class consisting of all persons and entities other than defendants who purchased or otherwise acquired Ericsson securities between April 27, 2017 and February 25, 2022both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of federal securities laws and to pursue remedies under Sections 10(b) and 20(a). ) of the Securities Exchange Act of 1934 (the “Exchange Act”) and rule 10b-5 enacted thereunder, against the Company and certain of its principal officers
If you are a shareholder who purchased or otherwise acquired Ericsson securities during the Class Period, you have until May 2, 2022 ask the court to name you as the lead plaintiff for the class. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those making inquiries by e-mail are encouraged to include their mailing address, phone number and number of shares purchased.
[Click here for information about joining the class action]
Ericsson, together with its subsidiaries, provides communications infrastructure, services and software solutions to telecommunications and other industries. The Company operates, among other countries, in the Republic of Iraq (“Iraq“).
Ericsson has a well-documented history of using bribes to secure business in countries around the world. Middle East and Asia. For example, in December 2019Ericsson was the subject of a U.S. Securities and Exchange Commission (“SEC”) action alleging, among other things, that the company used third-party consultants and improper payments from 2011 to the start of 2017 to access activities in Djibouti, Saudi Arabia, and China. The Company also entered into a Deferred Prosecution Agreement with the US Department of Justice (“DOJ”) the same month for its illicit business dealings.
As a result of the aforementioned regulatory enforcement actions, which resulted in the imposition of a fine on Ericsson for $520 million and almost $540 million by the DOJ and SEC, respectively – Ericsson has repeatedly assured investors that the company has a “zero tolerance” stance on corruption and is making significant investments in related programs. For example, in a December 2019 press release, the Company claimed that it was “[e]to improve . . . internal anti-corruption and compliance awareness campaigns (including the company’s zero-tolerance policy for corruption). Similarly, in its 2019 annual report, the company claimed to have “zero tolerance for corruption” and “[s] difficult every day to build a culture of compliance, firmly anchored within the organization, to ensure that such an event will not happen again.”
The Complaint alleges that, throughout the Class Period, the Defendants made materially false and misleading statements regarding the company’s business, operations and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Ericsson overstated the extent to which it had reformed its business practices to eliminate the use of kickbacks to secure business in foreign countries; (ii) Ericsson had paid bribes to the terrorist group Islamic State in Iraq and Syria (“ISIS” or “Islamic State”) to access certain transportation routes in Iraq; (iii) as a result, the income of the Company derived from its activities in Iraq were, at least in large part, derived from unlawful behavior and therefore unsustainable; and (iv) as a result, the Company’s public statements were materially false and misleading at all material times.
At February 15, 2022, during intraday trading hours, Ericsson issued a press release disclosing media inquiries into its business dealings in Iraq. The press release assured investors of the company’s “transparency” regarding these investigations, while vaguely alluding to having undertaken its own investigative and compliance efforts.
Then, on February 16, 2022Ericsson’s CEO told a Swedish newspaper that the company may have made payments to ISIS for access to certain transport routes in Iraqnoting that the Company had identified “unusual expenses dating back to 2018” but had not yet determined the ultimate recipient of funds for those expenses, although Defendants could “see that they are disappearing[,]and that Ericsson has spent “considerable resources trying to figure this out as best we can”.
Following these revelations, the price of Ericsson’s American Depositary Share (“ADS”) fell $1.44 per ADS, i.e. 11.57%, to close at $11.01 by ADS on February 16, 2022.
Finally, on Sunday, February 27, 2022the International Consortium of Investigative Journalists (“ICIJ”) published a report on Ericsson’s alleged relationship with the Islamic State in Iraq, citing a leaked internal investigation that found Ericsson made “tens of millions of dollars in suspicious payments” over nearly a decade to maintain operations in the country. The ICIJ report also alleged that “a spreadsheet lists the company’s investigations into possible bribes, money laundering and embezzlement by employees in Angola, Azerbaijan, Bahrain, Brazil, China, Croatia, Libya, Morocco, United States and South Africa[,]which “have not previously been disclosed”.
At this news, the price of Ericsson’s ADS plummeted $0.84 per ADS, i.e. 8.3%, since its closing price on February 25, 2022to close at $9.28 by ADS on February 28, 2022the next trading day.
Pomerantz LLP, with offices in new York, Chicago, Los Angeles, Parisand Tel Aviv, is recognized as one of the leading law firms in the areas of corporate litigation, securities and antitrust. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breaches of fiduciary duty and corporate misconduct. The firm recovered numerous multimillion-dollar damages on behalf of class members. See www.pomlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP