EDINBURGH The £3.2 billion ($6.4 billion) Lothian Pension Fund, Edinburgh, joined a class-action suit against Ericsson LM Telephone Co., claiming the company made false statements about its financial health in 2007.
The pension fund lost $3.2 million of its $18.9 million investment from Feb. 2 to Nov. 20 because of a fall in share price, according to an e-mail from Stewart Argo, media manager for the Edinburgh City Council, which filed the suit on behalf of the fund. Lothian's complaint claims the company reassured investors of continued strong growth in 2007 despite a weakening market. But lower than expected earnings announced Oct. 16 caused the stock price to fall to $23 per share as of Nov. 21 vs. a high of $43.41 July 12.
The Lothian fund joined a suit filed in November by Labaton Sucharow LLP, a New York law firm, on behalf of the $3.1 billion State-Boston Retirement System because it is the fund's policy to take an active interest in environmental, social, and corporate governance issues and not be merely a passive investor, Mr. Argo said. Lothian filed its complaint in U.S. District Court in New York in late December.
Ericsson spokesman Fredrik Hallstan said the company did not have details about the lawsuit.
We don't know what the lawsuit is about right now, he said. The court in New York probably knows more than we do at this point.