NEW YORK–(BUSINESS WIRE)–#Action–Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Telefonaktiebolaget LM Ericsson (“Ericsson” or the “Company”) (NASDAQ: ERIC) in the United States District Court for the Eastern District of New York on behalf of all persons and entities who purchased or otherwise acquired Ericsson securities between April 27, 2017 and February 25, 2022, both dates inclusive (the “Class Period”). Investors have until May 2, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) Ericsson overstated the extent to which it had reformed its business practices to eliminate the use of bribes to secure business in foreign countries; (2) Ericsson had paid bribes to the terrorist group the Islamic State in Iraq and Syria (“ISIS” or the “Islamic State”) to gain access to certain transport routes in Iraq; (3) accordingly, the Company’s revenues derived from its operations in Iraq were, in at least substantial part, derived from unlawful conduct and thus unsustainable; and (4) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On February 15, 2022, during intraday trading hours, Ericsson issued a press release disclosing media inquiries into its business dealings in Iraq. That press release assured investors of the Company’s “transparency” regarding these inquiries, while vaguely alluding to having undertaken its own investigative and compliance efforts.
Then, on February 16, 2022, Ericsson’s Chief Executive Officer (“CEO”) told a Swedish newspaper that the Company may have made payments to ISIS to gain access to certain transport routes in Iraq, noting that the Company had identified “unusual expenses dating back to 2018” but had not yet determined the final recipient of the funds for those expenses, although Defendants could “see that it disappeared[,]” and that Ericsson has spent “considerable resources trying to understand this as best we can.”
Following these disclosures, Ericsson’s American Depositary Share (“ADS”) price fell $1.44 per ADS, or 11.57%, to close at $11.01 per ADS on February 16, 2022.
Finally, on Sunday, February 27, 2022, the International Consortium of Investigative Journalists (“ICIJ”) published a report on Ericsson’s alleged dealings with ISIS in Iraq, citing a leaked internal investigation that revealed that Ericsson had reportedly made “tens of millions of dollars in suspicious payments” over nearly a decade to keep its business in the country.
The ICIJ report also alleged that “a spreadsheet lists company probes into possible bribery, money laundering and embezzlement by employees in Angola, Azerbaijan, Bahrain, Brazil, China, Croatia, Libya, Morocco, the United States and South Africa[,]” which “have not been previously disclosed.”
On this news, Ericsson’s ADS price fell $0.84 per ADS, or 8.3%, from its closing price on February 25, 2022, to close at $9.28 per ADS on February 28, 2022, the next trading day.
If you purchased or otherwise acquired Ericsson shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Alexandra Raymond by email at email@example.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.