Adding insult to injury is never a concern for the litigious among us, and one man has filed a class action suit against Nokia in New York because its comeback, thus far, has been anything but. Complaint Robert Chmielinski, represented by Robbins Geller Rudman & Dowd, alleges that Nokia’s shift to the Windows Phone platform has not halted its sliding position in the global smartphone market, as the company promised it would. Nokia reported last month that it lost a staggering $1.7 billion in the first quarter of 2012 after losing nearly $1.3 billion in the fourth quarter last year. According to Chmielinski and the class he claims to represent, Nokia violated federal securities laws by telling investors that the switch to Windows Phone would stop the bleeding.
“The complaint alleges that during the Class Period, defendants told investors that Nokia’s conversion to a Windows platform would halt its deteriorating position in the smartphone market. It did not,” the lawsuit states. “This became apparent on April 11, 2012, when Nokia disclosed that its first quarter performance would be worse than expected. Nokia expected its first quarter 2012 non-IFRS Devices & Services operating margin to fall by 3%, and projected first quarter 2012 Devices & Services net sales of €4.2 billion.”
“It also disclosed a glitch in its newest Windows offering – the Lumia 900. Nokia had to immediately offer customers an automatic $100, making the phone essentially free,” the complaint continued. “As a result of this disclosure, the price of Nokia’s American Depositary Shares (‘ADRs’) dropped over 16% in a single day.”
Chmielinski and his layers seek unspecified damages for themselves as well as all individuals and institutions that owned publicly traded shares of Nokia stock during the class period. The complaint was filed with the United States District Court for the Southern District of New York on May 3rd.
Following the publication of this article, Nokia issued the following statement: “Nokia has become aware of the filing of a securities class action complaint naming Nokia Corporation as a defendant, filed in the US District Court for the Southern District of New York on May 3, 2012. Nokia is reviewing the allegations contained in the complaint and believes that they are without merit. Nokia will defend itself against the complaint.”
Updated with Nokia’s statement in final paragraph.
