Motorola Solutions Inc was declined to dismiss a class action lawsuit filed against the company over allegations that it misled its shareholders about deteriorating prospects for its cellphone business, resulting in investment losses.

On Monday, US District Judge Amy St. Eve in Chicago ruled there is a "genuine dispute" as to whether predecessor company Motorola Inc in 2006 and early 2007 hid key information about its ability to compete with such rivals as Nokia Oyj and Samsung Electronics Co Ltd.

The lead plaintiffs are the Macomb County Employees' Retirement System and the St. Clair Shores Police and Fire Pension System. The plaintiffs allege that they bought Motorola stock at inflated prices and suffered losses that accounted for more than one-fourth of its value from October 2006 to early January 2007, when the company warned of lower-than-expected quarterly results.

They said Motorola assured them that its so-called third generation (3G) phone product portfolio was "on track" when it knew that portfolio was in "tatters," and that the company entered into $440 million of licensing transactions to obscure a more than $1.1 billion shortfall in operating earnings.