By Supantha Mukherjee

STOCKHOLM, (Reuters) – Shares in Ericsson fell 2.5% Friday after the U.S. Securities and Exchange Commission started a separate investigation into Ericsson’s conduct regarding misconduct in Iraq.

U.S. agents had earlier investigated Ericsson and ordered Ericsson to pay a $1billion fine as part of an agreement in a bribery matter. The company also needed to sign a Deferred Prosecution Agreement (DPA).

As a result of news of an SEC investigation, analysts at Jefferies stated that they believe the total penalty in this round will likely be higher.

DoJ had begun this process already.

Ericsson’s 2019 investigation led to the controversy. It broke in February. The investigation revealed that payments were made to Islamic State in Iraq.

Despite the fact that the misconduct was not committed by the current managers, the DoJ received the report in its entirety and requested an investigation.

Board members could be held liable for any disputes by investors who voted against their release. Board members may be held personally responsible for their actions.

Ericsson’s market value has fallen by about three-quarters since February. Analysts say that while any possible fine can be priced into shares, this creates an overhang to reach a settlement.

The experts believe that any settlement would not occur this year, and may even derail Ericsson’s deal worth $6.2 billion to purchase Vonage, a U.S.-based cloud communication firm.

Although it was initially expected that the deal would close by the end of the first quarter, the closing has been delayed until August.

Mads Rosendal is an analyst from Danske Bank Credit Research. She wrote that the new probe might also cause delays to Vonage’s acquisition. This we see now as having a slight higher likelihood of getting cancelled.