US judge promises rapid decision in Nokia case
Plaintiffs' side under intense questioning in New York class action trial
|
|
A United States federal judge in New York spent nearly four hours listening to arguments of the two sides in a class-action suit against Nokia, sparked by a sharp decline in the company's share price in the spring of 2004.
Nokia is fighting the suit, and the judge, Kenneth Karas, promised to decide on the matter "as soon as possible" - that is, within weeks or at most a few months.
Karas is to rule on whether or not the suit should be dismissed. If he does not reject the complaint, the process will continue, possibly culminating in a jury trial in a few years' time.
The stakes in the case are quite high. None of the lawyers wanted to give any comments to the press on the unfinished matter, but one of the lawyers for the plaintiffs said that thousands of investors are seeking compensation for the collapse in Nokia market prices in April 2004 when Nokia's shares lost a combined 25 billion US dollars (EUR 20 billion) in value.
Representing the plaintiffs, Beth Kaswan of the law firm Milberg Weiss, brought a large graph into the courtroom displaying the development of Nokia's share prices between the beginning October 2003 and the end of July 2004. The plaintiffs say that all who bought Nokia shares in that period are entitled to compensation.
The graph indicated how Nokia's shares dropped by about 16 percent on July 6th, 2004. On the same day Nokia said that its turnover declined in the first quarter of that year. Previously, the company had predicted significant growth.
Kaswan says that Nokia had admitted that there were problems with its product range. Another sharp decline came ten days later when Nokia announced that its sales of mobile phones had fallen significantly from the previous year.
Those behind the class action suit tried to show that Nokia's management had been aware of the problems long before they were made public, and that they had therefore deliberately deceived investors, who would be entitled to compensation.
In addition to the company as a whole, six of Nokia's top management are named in the suit. Two of them, Matti Alahuhta and Pekka Ala-Pietilä have left the company, and the key figure in the drama, CEO Jorma Ollila will step down in the early summer.
Based on Friday's events, none of the three need lose much sleep over the case. Nokia's lawyer, Ken Kramer of the Shearman & Sterling law firm, had it easy, while the plaintiffs' Kaswan faced intense questioning by the judge.
The judge appeared to be better prepared than Kaswan. Karas, who has been on the bench for just two years, had carefully studied the piles of documents that were as thick as several telephone books. He appeared to know the whole case and its background better than anyone else in the courtroom.
Karas indicated a number of times that he had not found anything in the statements of Nokia's management that would suggest deliberate deception.
The plaintiffs say that praise from Nokia's managers for their own selection of products constituted deliberate deception, because at the time Nokia lacked a clam-shell model. Karas saw the statements of the Nokia management to be typical for businessmen with confidence in themselves and their products.
Ollila's good command of English also came out during the hearing.
Nokia's lawyer Ken Kramer said that Ollila had spoken English, and not his native tongue, with market analysts, and that "perhaps an English professor at Harvard would not speak in exactly the same way". However, Karas, who had "heard" Ollila through documents, gave him recognition: "I lift my hat to Mr. Ollila's language skills."
The class-action suit was raised on the day that the share prices fell. The process has continued for nearly two years.
Helsingin Sanomat
|
| 30.1.2006 - TODAY |
 US judge promises rapid decision in Nokia case |
|
