Nokia Targeted in US Class Action Suit
A class action complaint against Nokia alleges the company committed securities fraud when describing its operations in 2008.
The class action complaint was filed on Friday in U.S. District Court for the Southern District of New York. It names some of the company's executives, including CEO Olli-Pekka Kallasvuo.
Between January and September 2008, Nokia allegedly failed to disclose manufacturing and supply shortage problems, according to a statement from law firm Coughlin Stoia. The complaint was filed on behalf of the City of Roseville Employees' Retirement System and others who bought shares between Jan. 24, 2008, and Sept. 5, 2008.
Nokia also allegedly failed to communicate that it was losing market share due to intense price cuts by competitors and had to slash its own ASPs (Average Selling Price) to maintain market share, Coughlin Stoia said.
When Nokia lowered its market outlook on Sep. 5, 2008, the company's share price dropped by about 8 percent. The plaintiffs are looking for damages attributed to the drop. Nokia believes the claims are without merit, according to a statement issued by the company on Monday.
In other Nokia news on Monday, the company said it plans to cut up to 285 employees at its manufacturing plant Salo, Finland. The cuts are being made as the plant is modified to only manufacture "high-value smartphones," Nokia said in a statement. Currently, the Salo plant employs about 2,200 people.