b'The court concluded that plaintiffs failed to allegeOn March 28, 2017, Ericsson announced that it loss causation, noting that although plaintiffs allegedanticipated a write-down of asset value of between defendants corrective disclosures caused stock prices$900 million and $1.16 billion in its first quarter financial to drop substantially, plaintiffs had again failed to allegereport because, as the companys officers explained facts sufficient to demonstrate that those correctiveon a conference call the same day, a few, specific disclosures revealed the prior statements regarding theand certain large contracts encountered negative 1% figure were false. Because none of the correctivedevelopments, which could be lower [sic] expected disclosures specifically referred to the number orrevenues or higher costs to complete those projects . percent of customers that experienced service issuesdue to specific events during the first quarter. By the following the transition, the court held plaintiffs hadclose of business on March 28, 2017, Ericssons share failed to allege those corrective disclosures directlyprice fell 3.59% from $6.69 to $6.45. contributed to Plaintiffs loss.On April 25, 2017, Ericsson released its quarterly results The court dismissed the case with prejudice becausefor the first quarter of 2017, including the $1.08 billion it had already granted plaintiffs leave to amendwrite-down. Ericsson explained that the write-down was their complaint three times, but plaintiffs had notthe result, in part, of additional project costs . which demonstrated that they could cure the deficiencies indue to recent negative developments are not expected their claims. Plaintiffs filed a notice of appeal on to be covered by future project revenues. On July April 6, 2020. On April 14, 2020, Frontier and its18, 2017, Ericsson released its results for the second subsidiaries filed voluntary petitions for relief underquarter of 2017, reporting [w]e are not satisfied with Chapter 11 of the United States Code. Consequently, theour underlying performance with continued declining case has been stayed pursuant to Section 362(a) of thesales and increasing losses, and disclosed forty-Bankruptcy Code. two contracts accounting for $892 million in revenue in 2016 would have to be exit[ed], renegotiate[d], or transform[ed]. Ericsson further reported an Oklahoma Law Enforcement Retirementincreased risk of further market and customer project System et al. v. Telefonaktiebolaget LMadjustments, which would have a negative impact on Ericsson et al., Case No. 18-cv-3021, 2020results, estimated to [$386 million$643 million U.S. WL 127546 (S.D.N.Y. Jan. 10, 2020)dollars] for the coming 12 months. The same day, Contracting and Accounting PracticesEricssons share price fell 16.62% from $7.28 to $6.07.An investor filed a putative securities class action Telefonaktiebolaget LM Ericsson (Ericsson) is a publiclawsuit against Ericsson and several of its officers company headquartered in Sweden that providesand directors alleging violations of Sections 10(b) and hardware and services for telecommunications20(a) of the 1934 Act and Rule 10b-5 promulgated networks. The companys primary customers arethereunder. Defendants moved to dismiss the amended telecom and network operators, such as AT&T andcomplaint on December 21, 2018, and on December 27, Verizon. Two thirds of Ericssons business results from2018, the court ordered plaintiff to either file a second large, multi-year contracts.amended complaint to address defendants arguments Over the years, Ericsson regularly stated in its financialin their motion to dismiss, or to complete briefing on the reports that it complied with International Financialmotion to dismiss. Reporting Standards (IFRS), including by recognizingPlaintiff opted to file a second amended complaint on revenue when the services have been provided,January 25, 2019 alleging that, during the class period, generally pro rata over the contract period, andEricssons reported financial metrics, including its sales, that provisions for any estimated losses are mademargins, income, and revenue, were materially false immediately when losses are probable. However, onand misleading because Ericsson failed to disclose July 17, 2016, a Swedish news outlet published an articletwo alleged contracting practices and two alleged claiming that Ericsson used undisclosed, aggressiveaccounting practices, each affecting the companys accounting techniques. For instance, the article claimedlong-term service contracts. First, plaintiff alleged the that the company prematurely recognized revenue tocompany entered into unprofitable, or loss-leading, the point that revenue from existing long-term contractscontracts in attempt to gain greater market share. had been so fully recognized that the contracts wereThe company allegedly encouraged loss-leading virtually emptythat is, that most of the companyscontracts by an internal policy that began in 2016 that long-term contracts had already been accounted forallegedly prioritized signing contracts at any cost, as sales. Ericsson denied the articles allegations thewithout concern for whether project costs ultimately next day in an official statement. Ericssons stock priceexceeded revenues. Second, plaintiff claimed the dropped 9% from $7.77 on July 18, 2016 to $7.08 oncompany under-estimated, or under-scoped, contract July 19, 2016. 63'