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Mobile TeleSystems PJSC

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Case Summary

Company Name
Mobile TeleSystems PJSC
Stock Symbol
MBT
Class Period
March 19, 2014 to March 7, 2019
Motion Deadline
May 18, 2019
Court
Eastern District of New York

The complaint charges Mobile TeleSystems and certain of its current and former officers with violations of the Securities Exchange Act of 1934.  Mobile TeleSystems provides telecommunication services in Russia, Ukraine, Turkmenistan and Armenia.  On March 18, 2014, the Company announced that it had “received a voluntary request for documents and information regarding [its] business in Uzbekistan from the [SEC] regarding investigations into the activities of unaffiliated parties.”

The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations.  Specifically, defendants failed to disclose that Mobile TeleSystems and its subsidiary were involved in a scheme to pay $420 million in bribes in Uzbekistan that had resulted in investigations by the U.S. Department of Justice (“DOJ”) and the SEC into the Company’s Uzbekistan operations, and, as a consequence of this scheme, Mobile TeleSystems would eventually be forced to pay approximately $850 million in criminal penalties to the U.S. government.  As a result of this information being withheld from the market, Mobile TeleSystems securities traded at artificially inflated prices of as high as $20 per share during the Class Period.

On November 20, 2018, the Company disclosed it had reserved approximately $840 million as the potential liability concerning investigations by the SEC and DOJ into its former operations in Uzbekistan.  On this news, the price of Mobile TeleSystems shares fell 8%.  Then on March 7, 2019, the DOJ reported that the Company and its subsidiary had entered into an agreement to pay $850 million in penalties to the United States to resolve charges arising from its role in the scheme to pay $420 million in bribes in Uzbekistan.  On this news, the price of Mobile TeleSystems shares fell another 3% to close at $7.54 per share on March 7, 2019.

Class Period: March 19, 2014 - March 7, 2019
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