New York, NY (April 6, 2018) – Labaton Sucharow LLP announces today, that on April 5, 2018, it filed a securities class action lawsuit on behalf of its client Bristol County Retirement System (Bristol County) against Telefonaktiebolaget LM Ericsson (Ericsson or the company) (NASDAQ: ERIC), and certain of its senior executives (collectively, the defendants). The action, which is captioned Bristol Cty. Ret. Sys. v. Telefonaktiebolaget LM Ericsson, No. 18-cv-03021 (S.D.N.Y.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act), and U.S. Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired Ericsson American Depositary Shares (ADSs) between April 8, 2013 and July 17, 2017, inclusive (the class period).
Ericsson provides computer networking hardware, software, and related services to telecommunications companies around the world. Services provided by the company include systems integration, network rollouts, and consulting projects that are often structured as multiyear contracts. In 2015, revenue from services accounted for more than half of the company’s total revenues.
During the class period, Ericsson claimed that its financial statements were prepared in accordance with International Financial Reporting Standards (IFRS). However, the defendants violated IFRS by materially overstating service revenues and improperly delaying the recognition of at least $1 billion in expenses on its long-term service projects.
The company’s improper accounting on the long-term service project contracts and/or the associated material impact on Ericsson’s financial performance was revealed through a series of disappointing financial results, culminating on July 18, 2017, when the company revealed that it had identified 42 long-term service contracts to date with total annual sales of almost $1 billion that Ericsson would exit, renegotiate, or transform. On this news, Ericsson ADS price fell $1.21 per share, or 16.62 percent, to close at $6.07 per share on July 18, 2017.
If you purchased or acquired Ericsson ADSs during the class period, you are a member of the “class” and may be able to seek appointment as the lead plaintiff. Lead plaintiff motion papers must be filed with the U.S. District Court for the Southern District of New York no later than June 5, 2018. The lead plaintiff is a court-appointed representative for absent members of the class. You do not need to seek appointment as the lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as the lead plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at firstname.lastname@example.org. You can view a copy of the complaint here.