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Ericsson, CEO and CFO Facing US Class Action Lawsuit – Networking

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Swedish telecommunications company Ericsson, its chief executive and chief financial officer have been named as defendants in a U.S. class action lawsuit for misleading investors about the company’s transactions in Iraq, a New York court filing said. .

Ericsson is at the center of a scandal over potential payments to the Islamic State in Iraq.

Last week, the US Department of Justice said it breached a 2019 Deferred Prosecution Agreement (DPA) for failing to fully disclose details of its operations in Iraq.

The filing, filed by law firm Pomerantz with the District Court for the Eastern District of New York, said, among other things, that Ericsson misled investors by overstating the extent to which it eliminated the use of bribes.

A spokesperson for Ericsson could not immediately be reached for comment, but Ericsson said in a brief statement that the company and “certain (company) executives” had been named as defendants in connection. of “allegedly false and misleading statements” regarding Iraq.

Under the terms of the 2019 DPA, Ericsson paid more than US$1 billion (A$1.4 billion) to solve a series of corruption investigations, involving bribery in China, Vietnam and Djibouti, and agreed to cooperate with the department in ongoing investigations.

Ericsson has lost almost a third of its market value since the media reported the alleged kickbacks in February.

Ericsson said an internal investigation, which ended in 2019 but was not made public until February after media inquiries, identified payments intended to circumvent Iraqi customs at a time when militant organizations, including the Islamic State, controlled certain roads.