Ericsson faces class action led by US lawyers who won $7.2bn from Enron

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The owners of UK retailer Phones4U “more concerned with lining their own pockets than running the business” a UK High Court was told on Friday.

ISS specialist Robbins Geller Rudman & Dowd scarier than ISIS

Ericsson and its subsidiaries are to face a legal renditioning over its involvement with terror group ISIS in Iran. It is now facing a class action conducted by Robbins Geller Rudman & Dowd, which leads the 2021 ISS Securities Class Action Services Top 50 report for recovering nearly $2 billion for investors last year alone.

With 200 lawyers in 9 offices, Robbins Geller’s attorneys have obtained many of the largest securities class action recoveries in history, including $7.2 billion from Enron, which was the largest securities class action recovery ever, it claims.

The Ericsson class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose the following: (i) Ericsson overstated the extent to which it had reformed its business practices to eliminate the use of bribes to secure business in foreign countries; (ii) Ericsson had paid bribes to the terrorist group the Islamic State in Iraq and Syria (ISIS) to gain access to certain transport routes in Iraq; (iii) accordingly, Ericsson’s revenues derived from its operations in Iraq were, in at least substantial part, derived from unlawful conduct and thus unsustainable; and (iv) as a result, Ericsson’s public statements were materially false and misleading at all relevant times.

On February 16, 2022, Ericsson’s CEO admitted that Ericsson may have made payments to ISIS to gain access to certain transport routes in Iraq, noting that Ericsson had identified “unusual expenses dating back to 2018” but had not yet determined the final recipient of the funds for those expenses, although defendants could “see that it disappeared,” and that Ericsson has spent “considerable resources trying to understand this as best we can.” On this news, Ericsson’s American Depositary Share (ADS) price fell 11%.

On February 27, 2022, the International Consortium of Investigative Journalists (ICIJ) revealed Ericsson’s alleged dealings with ISIS in Iraq, citing a leaked internal investigation that revealed that Ericsson had reportedly made “tens of millions of dollars in suspicious payments” over nearly a decade to keep its business in the country. The ICIJ report also alleged that “a spreadsheet lists company probes into possible bribery, money laundering and embezzlement by employees in Angola, Azerbaijan, Bahrain, Brazil, China, Croatia, Libya, Morocco, the United States and South Africa,” which “have not been previously disclosed.” “On this news, Ericsson’s ADS price fell an additional 8.3%, “further damaging investors,” says the legal release.

The US Private Securities Litigation Reform Act of 1995 permits any investor who purchased Ericsson securities during the Class Period to seek appointment as lead plaintiff in the Ericsson class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the class action lawsuit. The lead plaintiff can then select a law firm of its choice to litigate the class action lawsuit.