According to the Complaint, Telefonaktiebolaget LM Ericsson ("Ericsson" or the "Company"), together with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecommunications and other sectors. The Company operates in, among other countries, Iraq.
The Complaint alleges Ericsson has a well-documented history of using bribes to secure business in countries throughout the Middle East and Asia; for example, in December 2019, Ericsson was the subject of an SEC action alleging, among other things, that the Company used third party consultants and illicit payments from 2011 through early 2017 to access business in Djibouti, Saudi Arabia, and China. The Company also entered into a DPA with the DOJ the same month for its allegedly illicit business dealings.
The Complaint further alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the Complaint alleges Defendants made false and/or misleading statements and/or failed to disclose that: (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” or the “Islamic State”) to gain access to certain transport routes in Iraq; (iii) accordingly, the Company’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, the Company’s public statements were materially false and misleading at all relevant times.
On June 8, 2022, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on September 9. Defendants filed a Motion to Dismiss the amended Complaint on March 10.
On May 24, 2023, the Court issued an Order granting Defendants' Motion to dismiss. The case was dismissed with prejudice.