Ericsson (ERIC) Allegedly Paid Terrorists to Utilize Transport Routes in Iraq
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) securities between April 27, 2017 and February 25, 2022, for violations of the Securities Exchange Act of 1934. Ericsson, along with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecommunications and other sectors.
According to the complaint, on February 15, 2022, Ericcson issued a press release detailing its work in Iraq and noting “[u]nusual expense claims in Iraq, dating back to 2018, triggered a review that uncovered compliance concerns about breaches of the company’s Code of Business Ethics.” The press release provided details of the investigation and the outcomes, including terminating employees and third-party relationships and continued evaluation of the Company’s remediation plans.
On February 16, 2022, news outlets reported that Ericsson may have made payments to the ISIS terrorist organization to gain access to certain transport routes in Iraq. On this news, Ericsson’s ADS price fell $1.44 per share, or 11.57%, to close at $11.01 per ADS on February 16, 2022.
Then, on February 27, 2022, the International Consortium of Investigative Journalists published a report on Ericsson’s alleged dealings with ISIS in Iraq, revealing 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 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 prices fell $0.84 per ADS, or 8.3%, to close at $9.28 per ADS on February 28, 2022.
Next Steps: If you acquired shares of Ericsson (ERIC) between April 27, 2017 and February 25, 2022, you have until May 2, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.