Class Action Lawsuit Filed Against Nokia Over Securities Misrepresentation

Strategic Insights -

A class action lawsuit was filed against Nokia on April 6, 2004, alleging that the company's management made material misrepresentations to the market regarding the company's sales growth and market position between January 8, 2004, and April 6, 2004. The lawsuit seeks remedies under the Securities Exchange Act of 1934 and names several top executives, including Jorma Ollila and Matti Alahuhta, as defendants. On the day the news was announced, Nokia's ADRs fell 16% to $17.73 in midday trading on volume in excess of 71 million shares.

Key Takeaways:

  • The lawsuit, numbered 04 CV 2646, is pending in the United States District Court for the Southern District of New York before the Hon. Richard M. Berman.
  • The complaint alleges that Nokia's management made a series of material misrepresentations to the market, including statements about sales growth, market growth, and the company's market position in mobile phones.
  • The lawsuit names several top executives, including Jorma Ollila (Chairman and CEO), Matti Alahuhta (Chief Strategy Officer), Pekka Ala-Pietila (President), and Richard A. Simonson (Chief Financial Officer), as defendants.
  • The complaint alleges that Nokia's ADRs fell 16% to $17.73 in midday trading on April 6, 2004, on volume in excess of 71 million shares.
  • The lawsuit seeks remedies under the Securities Exchange Act of 1934 and may lead to a recovery for those who bought Nokia securities between January 8, 2004, and April 6, 2004.
  • The lead plaintiff will be appointed to direct the litigation, but the decision will not affect the class members' ability to share in any recovery.

Statistics:

  • 71 million shares traded in midday on April 6, 2004, after the news of Nokia's misrepresentations was announced.
  • 16% - the percentage decline in Nokia's ADRs on the day the news was announced.
  • $17.73 - the price of Nokia's ADRs in midday trading on April 6, 2004.
  • $21.15 - the price of Nokia's ADRs on April 5, 2004, the day before the news was announced.
  • January 8, 2004 - January 6, 2004 - the date range for which the lawsuit alleges Nokia made material misrepresentations.

Sources:

  • Milberg Weiss Bershad Hynes & Lerach LLP
  • http://www.milberg.com
  • http://www.milberg.com/cases/nokia/
  • PRNewswire, April 7, 2004