The Wall Street Journal reported on 5 August that more than 500 American service members and civilians were involved in the suit.
This is the second lawsuit that Ericsson is facing after its alleged payment of bribes in Iraq was revealed in The Guardian which based its report on leaks from the International Consortium of Investigative Journalists. Similar reports were also carried by the BBC and the Washington Post.
That case was reported in March and was filed by investors who claimed the company had misled them over its dealings in Iraq. Reuters said the filing, by a law company known as Pomeranz, claimed the company had misled investors by exaggerating the extent to which it had eliminated the use of bribes.
The American plaintiffs filed their case under the Anti-terrorism Act of 1990 which permits terrorism victims to go after damages in American courts; the Act also allows companies and individuals who are supporting terrorism to be targeted.
According to the WSJ report, the plaintiffs accused Ericsson of paying money to groups in order to facilitate business activities.
“The payments saved Ericsson money,” the complaint said. “It was cheaper to pay off Al Qaeda and Islamic State than to invest in the security necessary to mitigate the terrorists’ threats.”
In March, Ericsson said it had been told by the US Department of Justice that a disclosure it had made about its dealings in Iraq before cutting a deal with the DoJ was insufficient.
The Ericsson spokesperson was asked about the investors' lawsuit as well, but made no comment about it.