Ericsson cleared by US court over misleading investors - Mobile World Live

Ericsson cleared by US court over misleading investors

25 MAY 2023

A US court dismissed a lawsuit by Ericsson shareholders, ruling the Swedish vendor did not mislead investors about its compliance with US bribery laws following a corruption investigation settled in 2019.

In a statement, a district court in New York rejected plaintiff claims and concluded Ericsson did not violate any disclosure obligations to investors, ending a case which launched in March 2022.

The lawsuit was brought by a Boston-based pension fund, representing investors who bought Ericsson America Depositary Shares between April 2017 and March 2022.

It argued Ericsson had overstated how much it had eliminated the use of bribes after it had settled the corruption investigation with the Securities and Exchange Commission (SEC), when it was forced to make a $1.1 billion payment to the regulator.

The company faced a fine of $207 million on top of the settlement amount for failing to properly disclose information relating to the probe in 2019.

However, in this instance, Ericsson was found not to be in breach of laws, and the company added it would continue to vigorously defend the matter if appealed.

Ericsson also received further good news this week after stock exchange Nasdaq Stockholm also formally closed a review into the vendor’s public disclosure regarding its handling of the corruption probe in Iraq.

The company’s board is, however still on the hook for potential legal action over the issue from shareholders representing more than 10 per cent of its equity, after they voted against discharging them from liability at its AGM in March.



Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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