Nokia class action securities fraud lawsuit is big news in Finland

Last Updated on Friday, 26 February 2010 09:43 Written by info Friday, 26 February 2010 09:43

The securities fraud class action lawsuit pending in U.S. courts is all over the Finnish business papers.  For example, this article in Helsingin Sanomat describes the class action:

The mobile telephone giant Nokia faces a class-action suit in the United States. The suit was filed on behalf of investors on Friday last week in a US district court in New York. It concerns statements given out by the company in January and September of 2008 on the production volume of mobile telephones.
Nokia issued a statement on the lawsuit, saying that the accusations are without merit. The company plans to fight the demands by all means available.

According to the suit, Nokia failed to disclose its shortage of components and its production problems in the early part of 2008 when it presented its new products.
The plaintiffs also say that Nokia failed to disclose a decline in its market share as its competitors were slashing their prices, and as its average sales prices were declining.
****

The class-action suit is being pursued by the law firm Coughlin, Stoia, Geller, Rudman & Robbins on behalf of the pension fund of the municipal employees of the city of Roseville.
Nokia has faced similar class-action suits in 1995 and 2004. Both times the suits did not go to court, because they were rejected as being without merit.

Nokia responds to securities fraud lawsuit

Last Updated on Monday, 8 February 2010 11:05 Written by info Monday, 8 February 2010 11:05

Nokia wasted no time issuing a press release saying the securities fraud claims filed against it were “without merit.”

According to Nokia,it  “has reviewed the allegations contained in the complaint and believes that they are without merit. Nokia intends to defend itself against the complaint vigorously.”

Nokia class action complaint: first look

Last Updated on Monday, 8 February 2010 11:02 Written by info Monday, 8 February 2010 11:02

Several firms have filed shareholder class action complaints charging Nokia and certain Nokia officers and directors with violating Section 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5.

The complaints vary but all have the same basic allegations:

• that Nokia is a publicly listed manufacturer of mobile devices, and provides Internet services and digital map information worldwide.
• that in a class period from January 24, 2008 to September 5, 2008, Nokia shares and ADS were fraudulently inflated
• that defendants failed to disclose material adverse facts about Nokia’s true financial condition, business and prospects. Specifically, defendants failed to disclose: (a) that positive statements about Nokia’s product launches lacked reasonable basis especially in light of a component supply shortage and manufacturing problems; (b) that Nokia was losing market share due to intense price cuts by competitors; and (c) that defendants failed to disclose Nokia had dramatically slashed its ASPs (average selling prices) to maintain market share.
• On September 5, 2008, Nokia issued a press release announcing its third quarter 2008 outlook, and held a conference call.  In the call, Nokia cited a production glitch with a mid-range device and described price cutting on low end models by its competitors.
• In response to these statements, Nokia ADS prices on the New York Stock Exchange (NYSE:NOK) dropped approximately 8%, to $20.62, on heavy volume.