A US Court has dismissed a lawsuit against Ericsson by its US shareholders, finding that the vendor did not mislead investors about its compliance with anti-bribery laws.
A district court in New York rejected plaintiff's claims after the lawsuit was brought forward by a Boston-based pension fund in 2022.
The pension fund represented investors who bought Ericsson America depositary shares between April 2017 and March 2022.
It argued that the vendor had overstated how much it had eliminated the use of bribes after it settled the corruption investigation with the Securities and Exchange Commission (SEC), as it was forced to pay $1.1 billion to the regulator.
Ericsson agreed in March 2023 to pay an additional $206 million fine after pleading guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act, with the fine relating to Ericsson violating a 2019 deal with US prosecutors that required the telecoms firm to properly disclose information on its activities in Iraq, China, Vietnam, and Djibouti.
Dismissing the case against Ericsson, US District Judge William Kuntz in Brooklyn, New York, noted the vendor had issued "ubiquitous warnings" to investors raising "the possibility of future compliance failures" after the agreement.
"The motion to dismiss decision is subject to appeal from the plaintiff. Ericsson will continue to vigorously defend this matter if appealed," said Ericsson in a statement.
It was revealed earlier this year that the Ericsson board is still under scrutiny over the Iraq scandal, which saw the vendor admit it may have given money to the ISIS terror group in Iraq back in 2019.
Ericsson CEO Borje Ekholm and most of the vendor's board could be held financially responsible for their handling of a corruption probe in Iraq, when Ericsson shareholders voted against discharging them from liability, for the second year in a row, in March.
Nasdaq Stockholm concluded its review of Ericsson's public disclosure obligations concerning its 2019 Iraq internal investigation report, dismissing the matter. Nasdaq noted that it "cannot come to the conclusion that the content of the report was such that a reasonable investor would have used such information as part of his/her investment decision."
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