Telefonaktiebolaget L M Ericsson specified earlier disclosed information at an
analyst meeting on November 20, 2007 about expected sales without disclosing the
specification according to prescribed protocols. The Disciplinary Committee
found that this was inappropriate but it would have been excessive to classify
this as a contravention of the listing agreement.
Pursuant to OMX Nordic Exchange Stockholm's listing agreement, information that
is expected to affect the valuation of the company's listed securities to a
non-immaterial degree may not, except in specific cases, be disclosed in any
manner other than through public disclosure.
Ericsson publicly disclosed a profit warning on October 16, 2007 to the effect
that Ericsson's invoicing would amount to SEK 53-60 billion for the fourth
quarter of 2007. On November 20, 2007, Ericsson arranged an analyst conference
in New York under which it was stated that “We are likely to end up in the lower
end of the range.” After the new information was announced, the price of the
share fell by more than 10 percent.
The Disciplinary Committee concludes from experience that Ericsson's statement
about the sales most likely would end up in the lower end of the range would
result in what is known as a signal effect, which, in turn, often has an impact
on share price, regardless of whether this is considered rational or not. From
this viewpoint, the company must have expected that the information would affect
the valuation of the Ericsson share, regardless of what actually caused the drop
in price.
Accordingly, the Committee has concluded that it was inappropriate to allow the
sentence in question to be included in the information presented at the analyst
conference without ensuring that the information was simultaneously disclosed
publicly in the prescribed manner. This, in itself, does not necessarily mean
that Ericsson shall be deemed to have contravened the listing agreement. Only
information that is expected to affect the valuation of the listed shares to a
non-immaterial degree carries an obligation to ensure that it is disclosed
publicly. With-out doubt, good reason existed to assume that any impact on the
price would not be particularly significant considering that the forecast stood
firm and the external factors in question were well-known and could be
considered already discounted in the share price. Accordingly, the Committee
believes that, in this case, it would be excessive to classify the failure to
ensure that the information was publicly disclosed as a contravention of the
listing agreement.
For further information:
Jonas Rodny, OMX Nordic Exchange Stockholm +46 (0)8-405 72 67
About the Disciplinary Committee | The role of OMX Nordic Exchange in
Stockholm's Disciplinary Committee is to consider suspicions regarding whether
Exchange Members, brokers or listed companies have breached the rules and
regulations applying on the Exchange. If the Exchange suspects that a member,
broker or listed company has acted in breach of the Exchange's rules and
regulations, the matter is reported to the Disciplinary Committee. The Exchange
investigates the suspicions and pursues the matter and the Disciplinary
Committee issues a ruling regarding possible sanctions. The sanctions possible
for listed companies are a warning, a fine or delisting. The fines that may be
imposed range from one to 15 annual fees. The sanctions possible for Exchange
Members are a warning, a fine or debarment, while brokers may be warned or have
their brokerage license rescinded. The Disciplinary Committee's Chairman and
Deputy Chairman must be lawyers with experience of serving as judges. At least
two of the other members of the Committee must have in-depth insight into the
workings of the securities market.
Members: Supreme Court Justice Johan Munck (Chairman), Supreme Court Justice
Marianne Lundius (Deputy Chairman), Madeleine Leijonhufvud (professor), Stefan
Erneholm (company director) and Hans Mertzig (company director). Deputy Members:
Hans Edenhammar (MBA), Claes Beyer (lawyer), Jack Junel (company director),
Ragnar Boman (MBA) and Carl Johan Högbom (MBA).
