(Reuters) — Swedish telecom company Ericsson beat a lawsuit from U.S. shareholders on Wednesday, when a federal judge ruled it did not mislead investors about its compliance with U.S. anti-bribery laws.
The lawsuit filed by a Boston-based pension fund alleged that Ericsson had overstated the extent to which it had eliminated the use of bribes after settling corruption charges from the US Justice Department.
US District Judge William Kuntz in Brooklyn, New York, wrote that Ericsson had issued “so-common warnings” to investors that raise “the possibility of future compliance failures” after the deal.
Commenting on the court decision, Ericsson said in a statement on Thursday, “The motion to dismiss the decision is subject to appeal by the plaintiff. Ericsson will continue to vigorously defend this matter if appealed.”;
The suit was filed in March 2022, after the company’s stock fell sharply following DOJ allegations that Ericsson violated a 2019 deferred prosecution agreement to not fully disclose details of its operations in Iraq. The suit sought damages for investors who bought Ericsson American Depositary Shares between April 27, 2017 and March 1, 2022.
Ericsson agreed to pay $206 million and pleaded guilty in March to breaching the DPA agreement.
Under the terms of the 2019 DPA, Ericsson paid more than $1 billion to settle a series of corruption investigations, involving bribery allegations in China, Vietnam and Djibouti, and agreed to cooperate with the department in ongoing investigations.
The case is In: Telefonaktiebolaget Ericsson SecuritiesNo. 22-1167, US District Court, Eastern District of New York.