NEW YORK, April 25, 2022 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Telefonaktiebolaget LM Ericsson ("Ericsson" or the "Company") (NASDAQ: ERIC) and certain of its officers. The class action, filed in the United States District Court for the Eastern District of New York, and docketed under 22-cv-01167, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Ericsson securities between April 27, 2017 and February 25, 2022, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the 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 promulgated thereunder, against the Company and certain of its top officials
If you are a shareholder who purchased or otherwise acquired Ericsson securities during the Class Period, you have until May 2, 2022 to ask the Court to appoint you as 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 newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
Ericsson, together with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecommunications and other sectors. The Company operates in, among other countries, the Republic of Iraq ("Iraq").
Ericsson has a well-documented history of using bribes to secure business in countries throughout the Middle East and Asia. For example, in December 2019, Ericsson 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 illicit payments from 2011 through early 2017 to access business in Djibouti, Saudi Arabia, and China. The Company also entered into a Deferred Prosecution Agreement with the U.S. Department of Justice ("DOJ") the same month for its illicit business dealings.
Following the foregoing regulatory enforcement actions—which resulted in Ericsson being fined over $520 million and nearly $540 million by the DOJ and SEC, respectively—Ericsson repeatedly assured investors that the Company had a "zero tolerance" stance for bribery and was making significant investments in related programs. For example, in a December 2019 press release, the Company asserted that it was "[e]nhancing . . . internal anti-corruption and compliance related awareness campaigns (including the Company's zero tolerance for corruption)." Likewise, in its 2019 annual report, the Company asserted that it has "zero tolerance for corruption" and "work[s] hard every day to build a culture of compliance, anchored securely within the organization, to ensure that such an event will never happen again."
The complaint alleges that, throughout the Class Period, 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 bribes to secure business in foreign countries; (ii) 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; (iii) 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 (iv) 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 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.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. 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 in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP
