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Nokia shareholders file class action lawsuit against the company over Windows Phone "fraud"

Posted: , by Victor H.

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Nokia shareholders file class action lawsuit against the company over Windows Phone
Nokia has willfully misled its investors by falsely claiming that Lumia sales could turn around the company’s position. That’s the exact accusation Nokia shareholder Robert Chmielinski used when he filed a class action lawsuit against Nokia and its highest ranking officials - CEO Stephen Elop and CFO Tomy Ihamuotila. He doesn’t claim that Nokia didn’t know about the risks associated with the Windows Phone transtion. Instead, he throws a heavy punch by saying that the company knew, but misrepresented reality to sell shareholders on the new strategy.

We already know about Nokia’s catastrophic decline in the first quarter of 2012, and Chmielinski says that the Finnish company has misled investors all until then between October 2011 and April 2012, promising an impossible turn-around forced by WP phones.

Now, that the facts are out there, it’s obvious that for Nokia’s shares that are just spiraling down and for investors, this resulted in huge losses.

Chmielinski cements his point with quotes from press releases and conference talks showing that Nokia paints a bright picture to shareholders while reality gets gloomy. Other arguments include the $100 credit for the connectivity bug in Nokia Lumia 900, which also hurt the company’s financials. He then goes on to accuse Elop and Ihamuotila to be “engaged in a scheme to deceive the market.”

“During the Class Period, defendants had both the motive and opportunity to conduct fraud. They also had actual knowledge of the misleading nature of the statements they made or acted in reckless disregard of the true information known to them at the time.

In so doing, the defendants participated in a scheme to defraud and committed acts, practices and participated in a course of business that operated as a fraud or deceit on purchasers of Nokia securities during the Class Period.”

We don’t know whether Chmielinski’s lawyers can actually win this, but it’s definitely a black PR spot in Nokia’s yard when the company is struggling.


Press Release

48 Comments
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posted on 04 May 2012, 07:34 13

1. RaKithAPeiRiZ (Posts: 1353; Member since: 29 Dec 2011)


y u no make meego again ?

posted on 04 May 2012, 07:45 15

2. MechaFatigue (Posts: 7; Member since: 13 Jan 2011)


Go for Android Nokia.

posted on 04 May 2012, 09:07 3

17. pongkie (Posts: 503; Member since: 20 Aug 2011)


nah samsung pretty much overshadows everyone in the android family

posted on 04 May 2012, 09:12 9

18. ivanko34 (Posts: 617; Member since: 04 Sep 2011)


If Nokia does an android phone I leave samsung for Nokia

posted on 04 May 2012, 09:46 3

22. kanagadeepan (Posts: 685; Member since: 24 Jan 2012)


Yes.... There is no business worth investing without competition...

Still, I don't think Nokia has to struggle a lot if they are going through the android way, imho... For example, how about making a phone with cam of Pureview + ICS + 720p CBD AMOLED screen...

posted on 04 May 2012, 10:02 1

25. pongkie (Posts: 503; Member since: 20 Aug 2011)


nokia may have some innovations but samsung is fast...

posted on 05 May 2012, 09:59 2

38. Archan_Pe (Posts: 74; Member since: 08 Apr 2012)


but nokia's innovations beats samsung being fast.. cause nokia innovations make you go "OMG" like the pureviews samsung makes you go "COOL"

posted on 04 May 2012, 10:06 5

26. Credo (Posts: 695; Member since: 19 Apr 2012)


Windows Phone 8 will beat Android very soon

posted on 05 May 2012, 19:15 3

41. ericmeister (Posts: 4; Member since: 05 May 2012)


WP 7.5 with Lumia 900 already beat Android, at least according to Apple's cofounder Steve Wozniak. But yeah, after WP8, there definitely will be no match for it.

posted on 04 May 2012, 11:05 1

29. neutralguy (Posts: 1152; Member since: 30 Apr 2012)


I think, one of the reasons why nokia didn't join the android world is the fact that you need to use premium hardwares to function the OS smoothly. Nokia can't afford that now that they are in struggle. This is just my opinion, i don't know whether this is true, I'm just guessing :))

posted on 04 May 2012, 11:10 2

31. CharlieAtInfinity (Posts: 253; Member since: 10 Apr 2012)


You think Nokia with Android will sell??
NO
Samsung, HTC and now Sony have already taken over Android.. so only Windows, Symbian or meego is their only choice!!

posted on 04 May 2012, 16:11 3

35. downphoenix (Posts: 2357; Member since: 19 Jun 2010)


given how poorly WP7 has done so far, and how their dead platform Symbian has been outselling it STILL TO THIS DAY (maybe not in the US but literally everywhere else in the world)... no.

Nokia would have had a great rebirth if they went all in with Android or did a complete revamp of Symbian to make it much more competitive to Android and Iphone. They instead went with a platform that has been outperformed by Windows Mobile in marketshare. Nokia would have even been better off going with Blackberry for some kind of dual partnership.

The reason they went with Microsoft is so Elop could trojan horse Nokia and their patents over to Microsoft.

posted on 05 May 2012, 19:39 1

42. ericmeister (Posts: 4; Member since: 05 May 2012)


How poorly has WP7 actually done so far?

What I've heard, after AT&T started selling Lumia 900 in April in USA, theyve been out-of-stock. AT&T is actually surprised that they have sold so well. Also Amazon.com had Lumia 900 as top selling phone.

Also, the biggest operator in USA, Verizon (100 million customers), starts selling Lumia WP8 phones after summer, as well as Sprint (50 million customers). WP8 enables highend features for Nokia's phones, e.g. 720p resolution, Full HD Video, Dolby Surround, PureView Camera, Quad Core processor etc etc

And Nokia will bring 10'' tablet with Windows 8 to the market on Q4 as well. Elop has said that Nokia is taking the time to do the right thing with the tablets - they do not want to produce yet another unmemorable tablet that drown in the sea of iPads. Turkey has already invited Nokia to submit a bid for producing 15 million Windows 8 Tablets for them

http://nokiagadgets.com/2012/03/13/turkey-asking-a-bid-from-nokia-for-15-million-tablets/

Windows 8 will be released on PC's as well - this will definitely increase the popularity of phones, since after the realease the operating system's user experience is similar on PC's, Tablet's and Phones (+ XBox)

posted on 04 May 2012, 11:59 1

32. Credo (Posts: 695; Member since: 19 Apr 2012)


better leave Symbian behind, i hate that OS, so does almost everyone, Nokia is so stupid to leave MeeGo behind, a true multitask OS that could make great succes.

Love to see Nokia going further with MeeGo and Windows Phone at the same time and leave Symbian behind in the 1st century.

posted on 06 May 2012, 11:57 1

46. NateAdam8 (Posts: 217; Member since: 17 Feb 2012)


How can most people hate what thay've never tryed because of Nokia being stupid they only had crappy Symbian phone in the US when it should've made there better phone for pay as you go companys

posted on 05 May 2012, 19:13 1

40. ericmeister (Posts: 4; Member since: 05 May 2012)


Why should they change the best os in the market to crappy Android? Even Steve Wozniak said, that Lumia 900 is an amazing phone, and Android-phones have no match for it.

posted on 06 May 2012, 02:52 2

43. Forsaken77 (Posts: 548; Member since: 09 Jun 2011)


So they can make some money back! Consumers aren't buying windows Phones, that's a fact. If Nokia put out a high-end phone, it would sell. That's all Android is..... the highest spec phone wins. Android fans want the most powerful device on the planet, whether they need it or not. If Nokia Put out a high quality, high-end phone with that awesome screen technology, dual core S4 processor, gig of RAM and a good battery... it would sell millions. Nokia is also one of the few manufacturers that can differentiate itself with a hot looking device.

posted on 06 May 2012, 05:32

44. ericmeister (Posts: 4; Member since: 05 May 2012)


Consumer weren't buying Windows Phones, until Nokia Lumia 900 was released. Nokia will release highend phone on Q3 with WP8. The phone will include most of the features you described for highend phone, those werent just possible on WP7. WP8 phone will be released to kill iPhone though, not Android (Lumia 900 is already better than any Android phone, according to Apple's co-founder Steve Wozniak). The real Android-killer is Lumia 610 in the cheaper market-area.

With WP8, Lumia will get (according to MS Nerd) PureView 12 MP Camera (from Nokia N8, so not yet the revolutionary 41 MP from Nokia 808 - desing has it's limits too), Snapdragon S4 processor, ClearBlack screen (unlike with iPhones, this enables you to read screen easily in sunlight without boosting brightness) with 720p resolution, Full HD Video and Dolby Surround,

posted on 04 May 2012, 07:52 4

3. AndroidShiz (Posts: 145; Member since: 08 Nov 2011)


It's just so weird. Windows phone, failing to bring them from the ashes? Who knew? Besides HTC, Samsung, LG, Sony, Huawei, and Stevie Wonder I mean.

posted on 04 May 2012, 07:53 7

4. AhmadAlsayegh (Posts: 254; Member since: 18 Jul 2011)


I think Symbian reached its maturity and it was time for Nokia to innovate or do a change in the aspect of a merger, Nokia has taken the initiative towards a new strategy, but I guess it failed to turn the tables; especially that the smart phone market has a very fast pace...

First step in resolving any problem is admitting that you are in a problem, and honestly I don't see Nokia doing that, at least not the management

-posted from my Samsung Focus

posted on 04 May 2012, 08:14 5

5. AndroidShiz (Posts: 145; Member since: 08 Nov 2011)


It's the shareholders overall fault. The head dude used to work at Microsoft. His loyalty had nothing to do with shareholders making a profit. The two might as well be Manchurian Candidates. They should have dropped their shares as soon as they announced the exclusive partnership with a fledgling operating system. A wise CEO would've also developed Android phones, if only to save the company from spiraling. If it weren't for the forced Microsoft patents that MS uses against Android manufactures, and the special deal of "having to" make windows phones, I believe Samsung and HTC and the likes would completely abandon WP. It's never good when you have to basically force manufactures to make phones using their software, or else pay even higher fees for Android . How could you with basic common sense not get rid of your shares and invest elsewhere?

posted on 04 May 2012, 14:16 2

33. Whateverman (Posts: 3225; Member since: 17 May 2009)


Dude, that was beautiful!

posted on 04 May 2012, 08:20 5

6. HugeTroller (banned) (Posts: 80; Member since: 27 Apr 2012)


I love the current price of Nokia shares and I am buying more soon.

posted on 04 May 2012, 08:28 7

7. -box- (Posts: 3821; Member since: 04 Jan 2012)


Suing the company you're invested with isn't a great way to make stock prices magicaly go back up. Just sayin'

posted on 04 May 2012, 16:19

36. downphoenix (Posts: 2357; Member since: 19 Jun 2010)


well for some its not about getting the stock price back up but just recovering some of their lost investment that has been so shamelessly squandered. Not sure how Nokia manages its board elections, but heads of Elop and others will surely roll soon unless they can get that Microsoft buyout to occur soon.

posted on 04 May 2012, 08:28 4

8. iamcc (Posts: 1319; Member since: 07 Oct 2011)


So the dude is mad he fell for their sales pitch. Get over it...

posted on 04 May 2012, 08:30 2

9. Credo (Posts: 695; Member since: 19 Apr 2012)


Stop making low end Symbian devices, why do you think you don't make money anymore, becouse people don't want low end device's.
Go further with MeeGo and Windows Phone 8 and make all of those devices HIGH end !! Add quad cores, micro sd card support, 720p or higher screenresolutions, NFC, those polycarbonate designs and add on every device your newly pureview technology, add 1080p Full HD video recording, and most important of all, develope the Action Movie FX App for both MeeGo and Windows Phone!
Let me be the BOSS and Nokia will be the top nr 1 i'm sure of that !

posted on 05 May 2012, 10:08 1

39. Archan_Pe (Posts: 74; Member since: 08 Apr 2012)


DUDE thats nearly a stupid idea.... well put those thing in 1 or 2 nokia phones making it there flagship... but make em all? are you nuts? you know whats the point of making these low-ends? it to appeal to the people who want smartphones and still want it pocket friendly... but really symbian is just a bad idea... if they used a meego low-end.... that would appeal greatly to the not "sky-high" budgeted people....
P.S. if you were the boss of nokia and you had all those plans, LOL! it would probably in the book of world records... as the most stupid thing a company has ever done... LOL!

posted on 06 May 2012, 09:09 1

45. Credo (Posts: 695; Member since: 19 Apr 2012)


dude thats the point, open your eyes, both MeeGo and Windows Phone are for low or high end, they are both the most user friendly OSess out there, and most important of all, they don't need thens of thousands of processors to make it run smootly, they bote work smootly with just 1 core, thats the point ! just telling you my opinion :D

posted on 06 May 2012, 21:40

48. Archan_Pe (Posts: 74; Member since: 08 Apr 2012)


You didn'y get my point xD... Im agreeing with you on the "meego and windows phone" but to make them all high-end? thats pathetically insane! BTW you said "the both work smoothly with just 1 core" but in your earlier comment you said "add quad cores" xD... epic fail much?... I was commenting on the fact that your making everything high-end which is insane! I wasnt commenting on the OS... get me?

posted on 04 May 2012, 08:40 4

10. ron1niro (Posts: 54; Member since: 28 Mar 2012)


I think i will start calling Phonearena anti-nokia or anti- microsoft. Look at the headline, "Nokia shareholders file class action lawsuit against the company over windows phone fraud" Who are the "shareholders", if i read correctly, it is just one shareholder. How many shares does he have? Obviously he hasn't invested enough in the company and it wouldn't hurt him to see the company's shares plunge more because if he had, he wouldn't make such a stupid statement seeing that the company now seems to be getting back up albeit slowly. There are many indications that the windows phone platform can work for nokia, but it is sites like this one that are trying to spread a negative hype. Come on PA, be professional.

posted on 04 May 2012, 08:44 4

11. bragzter (Posts: 46; Member since: 21 Feb 2012)


Its surprising that Nokia was still making profits from Symbian even when Elop took over. Then he sent the "burning platform" memo. It was at that moment their share prices began falling at an alarming rate. He made them lose focus and forget about Nokia's core. Symbian was not what it use to be, yes, but the UI was its flaw. Belle has made Symbian look and feel like a brand new car. And there is MeeGo, a fresh intuitive OS that everybody loves and he wanted nothing to do with it not even if it did well. But he made sure it didn't by not launching worldwide, but instead in small, almost unknown markets. His came from Microsoft with their intentions.

posted on 04 May 2012, 08:53 7

13. FoneAddict (Posts: 206; Member since: 05 Jul 2011)


Totally agree. I think it's clear for all to see the E-Flop effect on Nokia.

It's not too late for Nokia to ditch Microsoft and switch to Android while also kick starting Meego as a possible backup plan for the longer term.

posted on 04 May 2012, 08:45 2

12. FoneAddict (Posts: 206; Member since: 05 Jul 2011)


The beginning of the end for Nokia.

posted on 04 May 2012, 09:01 6

14. A.aoudi (Posts: 125; Member since: 14 Feb 2012)


Though i am an android guy i have owned a few Nokia handsets lately. I have used Symbian belle and i think its a good platform and the real lifesaver for Nokia could be the 808 and not the Lumia series.

posted on 04 May 2012, 09:47 2

23. indra87 (Posts: 5; Member since: 02 May 2012)


True, but I'm actually interested in the Nokia Lumia series, especially the nokia Lumia 610 (beautiful hardware in my opinion) but I'll only buy one if they make bluetooth file transfer available. So, for now, I'd rather buy symbian.

posted on 04 May 2012, 10:32 1

27. A.aoudi (Posts: 125; Member since: 14 Feb 2012)


The 701 looks good. I think the screen is the one of the brightest screens in the market and other than that it has respectable hardware.

posted on 04 May 2012, 09:01 2

15. 7thspaceman (Posts: 1100; Member since: 14 Feb 2011)


I think all share holders of any company should have some common sense that trying something new is a Gamble. the Symbiam OS was no longer able to be good enough to compete with other OS's including Windows phone 7 series OS. The Meego OS was not ready for the market so says Elop and others in the company. The Windows 7 series smart OS is an award winning innovative OS but unfortunately it was not liked by the Public and the Microsoft Programmers had not yet configured it to use high tech smart phone components although all testers have shown it to work very well on single core CPU Mid tech components. it is bad now for Nokia to be having second thoughts because now Nokia Lumia 900's are selling like hotcakes in the USA and the Windows 8 smart phones are ready to go to market and they have all the High tech components in them to finally compete with Android or any Apple iPhone and the Windows smart phones Apps have reached 80000 and have all most of the popular APP. the board could force Elop and others in the company to make some Android smart Phones smart phones. which would be a Good move but it would take months of design work and equipment retooling before Nokia can get a single Android Ice cream sandwich class smart phone on the Market and they would still have no sure bets it would sell very given the level of competition they have to face from other Android smart phone manufacturers. it looks like Elop's days are numbered but getting Rid of him before Nokia's best the windows 8 class smart phones are on sale is bad business. Nokia should make the change when they have a good smart phone on the market place that will sell well and then make some Android smart phones to supplement their smart phones line up. the way to do it right is to have the best Windows 8 smart phones on the market and then make a good android smart phone
on the market..

posted on 04 May 2012, 09:04 2

16. Mobile-X-Pert (Posts: 565; Member since: 20 Dec 2010)


I don't know how the ''Nokia end'' will benefit consumer. More competition is better but your fanboism doesn't let you see that.

posted on 04 May 2012, 09:22 3

19. Bluesky02 (Posts: 1439; Member since: 05 Dec 2011)


Shareholders are promised many things, why this one is surprised?
Didn't they know its Business?

posted on 04 May 2012, 09:34 2

20. pongkie (Posts: 503; Member since: 20 Aug 2011)


its like suing the lottery because he didn't win the jackpot

posted on 04 May 2012, 09:41 1

21. lubba (Posts: 1310; Member since: 17 Jan 2011)


I hope this schmuksi loses miserably. Just a bunch of asshole lawyers looking for free money.

posted on 04 May 2012, 09:56 1

24. steelicon (Posts: 313; Member since: 02 Apr 2011)


If and when Nokia CEO Stephen Elop lied about the whole Nokia affair and all, it won’t be the first time, and it won’t be the last.

If and when Tomi Ahonen lied about the whole Nokia affair and all, it won’t be the first time, and it won’t be the last.

Fact #1 : Elop committed an Osborne Effect + Ratner Effect.

Fact #2 : Nokia sales are on a freefall, losing more in 18 months than the last 4 years.

Fact #3 : The new strategy is only gaining traction painfully slowly in a select limited market

Fact #4 : All other markets are being shelved and ignored (Symbian, MeeGo, Harmattan, Meltemi) and are being force-fed with the new strategy

Fact #5 : Due to the closed nature of the object of the new strategy, not all existing market base and platform agnostic but brand (Nokia) conscious segments are willing to adopt said object and are migrating to other platforms causing more loss and damages in sales.

I already have my eyes on Sony Mobile Xperia ION LT28i. I’d rather migrate to that than adopt Nokia Lumia WP7.5. And I would also suggest all of my customers to do the same, should they ask for my opinion and advice. Unless Nokia could successfully copy ALL and EVERY feature of Nokia 808 PureView RM-807 in their future FLAGSHIP devices.

Yes. In the Nokia Concept store, people still buy Nokia just because it is a Nokia, not because it is this or that platform. Working in a small to medium retailer/reseller company, it is my duty to know and to recommend what to push, what to sell

Only time will tell, and someone, somewhere will be entitled to say to all: “I told you so.”

posted on 04 May 2012, 11:01

28. NateAdam8 (Posts: 217; Member since: 17 Feb 2012)


It's good they made WP7 devices but they should've made some Android devices cause they'd be making a lot more cash by not sticking with a slowly developing company and with the money being made they could've focused on combing Symbian with Meego to make it good enough to bring to the USA for small companys to built a reputation so more Phone Companys could see they were worth it cause more people I know are on Companys like Boost Mobile, Cricket and Straight Talk

posted on 06 May 2012, 12:18

47. NateAdam8 (Posts: 217; Member since: 17 Feb 2012)


All I'm say is Nokia should've built up some kind of reputation in the US on the low end market with the Symbian phones cause most people don't know about it and if they'd just taken Android into consideration it might have worked cause they need the cash now but if they could get all things Nokia on to Windows Phones that might work, And there's no need for calling people stupid cause your mad at yourself just think harder and insult less

posted on 04 May 2012, 11:07 1

30. gwuhua1984 (Posts: 1237; Member since: 06 Mar 2012)


The share holder should of just disagreed with the partnership with Microsoft and tried to do something to stop it. Instead of letting it go through and now complaining about it when it doesn't work.

posted on 04 May 2012, 14:21 1

34. lubba (Posts: 1310; Member since: 17 Jan 2011)


You f**king android fanboys need to stfu. Why concern yourself with Nokia? there's already a slew of oems making android. Isn't that enough? So what if Nokia partnered with MS. Not the end of your android or android like world! The negative s**tty fanboish attitudes just make me sick!

posted on 04 May 2012, 21:33 2

37. InspectorGadget80 (Posts: 6583; Member since: 26 Mar 2011)


Getting sued by your own member that's FCKED up NOKIA. He TOLD u NOT TO GO TO Microsoft n look what happened

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