Ericsson LM Telephone Company Case 10/29/2007

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Company Name(s): 
Ericsson LM Telephone Company
Case Name: 
Ericsson LM Telephone Company Case 10/29/2007
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: ERIC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
10/29/2007
Class Period Begin: 
09/11/2007
Class Period End: 
10/15/2007
Summary: 

The original complaint charges Ericsson and certain of its officers and directors with violations of the Exchange Act. Ericsson is a Sweden-based company that offers a portfolio of telecommunication and data communication systems and services covering a range of technologies.
 
According to the complaint, during the Class Period, Defendants issued materially false and misleading statements regarding the Company’s business and financial results. The complaint alleges that Defendants knew or recklessly disregarded that: (i) the Company was experiencing declining sales in its networks due to lower sales of expansions and upgrades of mobile networks; (ii) sales in Western Europe were declining due to operator consolidation in several markets; and (iii) as a result, Defendants lacked a reasonable basis for their positives statements about the Company’s business.
 
The complaint further alleges that on October 16, 2007, before the market opened, Ericsson issued a release entitled “Lower than expected result for Ericsson in third quarter 2007”. That same day, after these results were issued, Ericsson’s stock collapsed to close at $31.33 per share, a decline of 24%, on volume of 42.7 million shares.