Securities Class Action Filed Against MobileTeleSystemsPJSC Alleges Overseas Misconduct
Posted on April 18, 2019
On March 19, 2019, a class action was filed against MobileTeleSystemsPJSC arising under the federal securities laws regarding the Company’s disclosure on March 19, 2014 that the United States Department of Justice also is conducting a parallel investigation related to the Company’s former operations in Uzbekistan which concerned Mobile and not merely the activities of unaffiliated parties. The extent of the alleged misconduct is still under investigation. It is not known at this time if sanctions will be at issue.
The lawsuit seeks relief on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired the publicly traded securities of MobileTeleSystems from March 19, 2014 through March 7, 2019, both dates inclusive. Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The extent of the misconduct at issue has not been fully established.
The Complaint alleges that the Defendants made false and/or misleading statements and/or failed to disclose that: (1) Mobile TeleSystems and its subsidiary were involved in a scheme to pay $420 million in bribes in Uzbekistan; (2) consequently, Mobile TeleSystems knew or should have known it would be forced to pay substantial fines to the U.S. government after disclosing in 2014 that the U.S. DOJ and SEC were investigating its Uzbekistan operations; (3) Mobile TeleSystems level of cooperation with the U.S. government and remediation was lacking; (4) due to the aforementioned misconduct, Mobile TeleSystems would be forced to pay approximately $850 million in criminal penalties to the U.S. government; and(5) due to the foregoing, Defendants’ public statements were materially false and/or misleading at all relevant times.
On November 20, 2018, the Company disclosed that it had reserved approximately $840 million USD (RUB 55.8 bln) as the potential liability concerning investigations by the SEC and the DOJ into its former operations in Uzbekistan. 30. On this news, shares of Mobile TeleSystems’ stock price fell $0.64 per share or nearly 8% to close at $7.45 per share on November 20, 2018.
On March 7, 2019, the DOJ reported that the Company and its subsidiary entered into an agreement to pay $850 million in penalties to the United States to resolve charges arising from its role in a scheme to pay $420 million in bribes in Uzbekistan. On this news, shares in Mobile TeleSystems’ stock fell $0.24 per share or over 3% to close at $7.54 per share on March 7, 2019, damaging investors.
The complaint alleges that as a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.
Thornton’s securities litigators have extensive experiencing litigating under the Securities Act of 1933 and the Securities Exchange Act of 1934. Congress passed both these laws to protect investors from securities fraud. The basic purpose of the 1934 and 1933 regulatory statutes is to protect investor confidence in the securities markets.
Thornton Law Firm is investigating the merits of this matter. Any interested investors may contact the firm’s securities litigation attorneys via email at email@example.com or calling (617) 720-1333.