Karl-Henrik Sundstrom, Ericsson’s former finance chief, is also named in the action. Together with chief executive Carl Henric Svanberg, he has been accused by US law firm Coughlin Stoia Geller Rudman & Robbins of shelving news of a slump in profits.

It is not known precisely how much the suit is for except that it is a matter of millions of dollars.

The class action specialist has claimed that directors including Sundstrom issued ‘materially false and misleading statements’, and ‘recklessly disregarded’ declining sales in its networks.

Coughlin Stoia said that the pair knew of the problems when they held an investor conference in London on 11 September, but when the market was informed a month later on 15 October, shareholders lost out as Ericsson’s market value nosedived by about $15bn (£7.2bn).

Sundstrom resigned soon after the warning was issued.

Coughlin Stoia has filed the lawsuit and is seeking compensation for any investors that bought shares between 11 September and 15 October.