KANSAS CITY — Sprint Nextel Corp. is facing a shareholder lawsuit that claims the wireless carrier hid key information from investors as its stock plummeted.
A single shareholder filed suit in the U.S. District Court of Kansas this week. The suit seeks class-action status and would cover anyone who bought Sprint stock between Oct. 26, 2006 and Feb. 27, 2008.
In the complaint, shareholder Cora E. Bennett said the company's 2005 purchase of Nextel Communications "turned out to be a disaster" that led to widespread technical problems between the two networks and customer service issues that eventually chased away millions of subscribers.
The suit claims company officials issued false and misleading public statements to keep investors from knowing how difficult the combination was going in a bid to keep the stock price from falling.
"As a result of defendants' false statements, Sprint's stock traded at inflated levels during the class period," the lawsuit claims. "However, after the ... revelations seeped into the market, the company's shares were hammered by massive sales, sending them down more than 65 percent from their class period high."
Sprint spokesman Matt Sullivan said Wednesday that the Overland Park, Kan.-based company had seen a news release about the lawsuit but not the suit itself. He said Sprint "has and will continue to operate in complete adherence with all federal securities laws."