Ericsson under fire over warning
Telecommunications giant Ericsson is being sued by investors over allegations that it delayed news of a profit warning
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.