Nokia, execs hit with class-action suit over disappointing Lumia sales
Attorneys at Robbins Geller Rudman & Dowd level the lawsuit against the mobile firm on behalf of shareholders.
Nokia has been hit with a class-action lawsuit charging the company with making promises it couldn't keep.
Law firm Robbins Geller Rudman & Dowd yesterday filed a class-action lawsuit (PDF) against Nokia and its executives in the U.S. District Court for the Southern District of New York on behalf of those who owned the company's shares between October 26, 2011, and April 10.
"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 law firm wrote in a statement. "This became apparent on April 11, 2012, when Nokia disclosed that its first quarter performance would be worse than expected."
Nokia has watched its business deteriorate over the last few years, and slow considerably during the last couple of quarters, forcing CEO Stephen Elop last month to warn of more trouble in 2012.
"Our disappointing devices and services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our business continues to be in the midst of transition," Elop wrote to investors last month. "Within our Smart Devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success."
But the class-action suit alleges there's no momentum to be had, due to declining margins in the company's Devices & Sales division. Therefore, the suit argues, shareholders should receive damages from Nokia for its troubles over the last six months.
Not everyone is so bearish on Nokia's future. In an interview published by Reuters today, Nokia's new chairman, Risto Siilasmaa, said he believes in the company's leadership and future prospects for success.
"I am confident that Nokia has the right team, right strategy and now increasingly also the right products on the market to get us through this transition period," Siilasmaa said.
CNET has contacted Nokia for comment on the class-action lawsuit. We will update this story when we have more information.