Ericsson Cleared by US Court over Misleading Investors
A US court dismissed a lawsuit by Ericsson shareholders. The court ruled that the Swedish vendor did not mislead investors about its compliance with US bribery laws following a corruption investigation settled in 2019.
A district court in New York rejected the plaintiff's claims and concluded Ericsson did not violate any disclosure obligations to investors, ending a case that 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 the stock exchange Nasdaq Stockholm formally closed a review into the vendor’s public disclosure regarding its handling of the corruption probe in Iraq.