Nokia shares plunge after company warns of compliance issues

Shares of Finnish smartphone maker Nokia (NOK) fell over 7% during the morning trade on Friday after the company stated in an SEC filing that it was probing transactions at Alcatel-Lucent, a French telecommunication firm it acquired in 2016, for any possible compliance violations in the US.

Under the Risk Factors section, the company stated, “During the course of the ongoing integration process, we have been made aware of certain practices relating to compliance issues at the former Alcatel Lucent business that have raised concerns.”

“The resolution of this matter could result in potential criminal or civil penalties, including the possibility of monetary fines, which could have a material adverse effect on our business, brand, reputation or financial position,” the company added.

The company told Reuters that the investigation is in an early stage and the regulatory authorities have been contacted to ensure transparency.

Nokia shares have gained 12.7% in the trailing 52 weeks and 8.7% since the beginning of this year.

READ: BLACKBERRY SETS UP NEW GOVERNMENT SOLUTIONS UNIT

Iran operations

The Finnish company stated that the opposing policies taken by the EU and the US with regards to trade relations with Iran have placed the company in a difficult position.

In order to avoid the strong sanctions put in place by the US on companies operating in Iran, Nokia said it does not intend to add to its business in Iran, but would complete the existing contractual obligations.

Earnings Transcript: Get access to timely and accurate verbatim transcripts that are published within hours of the event.