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Ericsson Islamic State Bribes Class Action Lawsuit Overview:
- Who: David Nyy filed a class action lawsuit against Ericsson.
- Why: Nyy claims Ericsson, along with its CEO and CFO, misled investors about the company’s business dealings in the Middle East, including that it made bribes to the Islamic State terrorist group.
- Where: The class action lawsuit was filed in New York federal court.
A new class action lawsuit alleges Ericsson misled investors about its use of bribes to secure contracts in the Middle East.
Plaintiff David Nyy claims shareholders were harmed after Ericsson’s stock dropped following news the Swedish telecommunications company may have made bribes to the Islamic State (ISIS) terrorist group.
Nyy claims Ericsson, along with its President and CEO Börje Ekholm and Executive Vice President and Chief Financial Officer Carl Mellander made false and misleading statements about the company’s compliance policies, operations and business.
Specifically, Nyy argues Ericsson “overstated the extent to which it had reformed its business practices to eliminate the use of bribes” in securing foreign business contracts and failed to disclose that it had paid bribes to ISIS to gain access to certain Iraq transport routes.
The complaint comes after Ericsson’s admission to the U.S. Securities and Exchange Commission that it failed to disclose that the U.S. Department of Justice had determined it broke a 2019 deferred prosecution agreement by not revealing the results of an internal investigation that found employees may have made payments to terrorists and committed other misconduct in Iraq between 2011 and 2019, Law360 reports.
The deferred agreement called for Ericsson to pay more than $1 billion in civil and criminal penalties after it was found to have committed bribery and participated in other schemes in the Middle East, Africa and Asia since 2000.
Ericsson Releases ‘Vague’ Press Release Reassuring Investors
Nyy claims Ericsson released a “vague” press release on Feb. 15 assuring investors that it was being transparent about media inquiries into its business dealings in Iraq.
Ericsson’s stock would then drop on Feb. 16 after Ekholm told a Swedish newspaper that it may have made payments to ISIS and again after a Feb. 27 report by the International Consortium of Investigative Journalists that claimed the company had made “tens of millions of dollars in suspicious payments” over the course of a decade, according to the class action lawsuit.
“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant losses and damages,” the class action lawsuit states.
Nyy claims Ericsson is in violation of the Securities Exchange Act of 1934. He is requesting damages for himself and all class members. He wants to represent a nationwide class of investors who purchased or otherwise acquired Ericsson stock between Apr. 27, 2017, and Feb. 25, 2022.
Were you injured after Ericsson’s stock price dropped following its admission that it may have made payments to ISIS? Let us know in the comments!
The plaintiff is represented by Jeremy A. Lieberman, J. Alexander Hood II and James M. LoPiano of Pomerantz LLP and Joshua E. Fruchter of Wohl & Fruchter LLP.
The Ericsson Islamic State Bribes Class Action Lawsuit is Nyy v. Telefonaktiebolaget LM Ericsson, et al., Case No. 1:22-cv-01167, in the U.S. District Court for the Eastern District of New York.
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3 thoughts onEricsson Class Action Alleges Investors Misled About Middle East Dealings, Possible ISIS Bribes
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