Nokia sued over Windows Phone deal
Investors are taking legal action over Nokia's ongoing decline
Nokia faces a class-action lawsuit, with a shareholder saying the deal with Microsoft has failed to revive the struggling firm as promised.
Filed in New York by a single complainant, the class-action suit accuses Nokia and some of its executives of making "false and misleading" statements about the potential for success with Windows Phone, and seeks damages for shareholders negatively affected by the move to Microsoft's OS.
"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," a statement from the law firm Robbins Geller Rudman and Dowd said. "It did not."
Defendants told investors that Nokia’s conversion to a Windows platform would halt its deteriorating position in the smartphone market
It pointed out that the firm's continuing decline "became apparent" when Nokia revealed its first quarter results were worse than expected. "It also disclosed a glitch in its newest Windows offering – the Lumia 900," the statement said. "Nokia had to immediately offer customers an automatic $100, making the phone essentially free."
The claim says the revelations led Nokia's share price to fall 16% in a single day - however, the rebate did help the phone sell out in the US, delaying the Lumia 900's arrival in the UK.
At a meeting with shareholders earlier this week, CEO Stephen Elop admitted the firm was struggling with smartphones: "It's hard to break through. It's been harder than we expected."
Class-action suits allow a group of people to collectively file a suit. The law firm is looking for anyone affected - any shareholder since the end of October - to join the suit, which is still in early stages. Nokia has yet to respond at the time of publishing.