BlackBerry faces class action suit in US
Oct 5, 2013 / 8:55 am
BlackBerry and some key executives are facing allegations they misled investors on the state of the company’s future, and how its BlackBerry 10 would fare against competitors.
A class action lawsuit filed by one BlackBerry shareholder claims leaders of the Waterloo, Ont.-based smartphone maker failed to tell investors that “the company was not on the road to recovery and reemerging as a lead player in the wireless communications industry.”
“In reality, the BlackBerry 10 was not well-received by the market,” said the lawsuit, filed in a Manhattan court by shareholder Marvin Pearlstein on Friday.
The class action suit seeks to represent “thousands” of shareholders who purchased BlackBerry stock from Sept. 27, 2012 to Sept. 20 of this year, a period in which it alleges executives misrepresented the state of BlackBerry’s operations.
Also named as defendants in the lawsuit are chief executive Thorsten Heins and chief financial officer Brian Bidulka.
None of the allegations have been proven in court, and a representative for BlackBerry declined to comment, saying the company is "reviewing the matter."
Last month, BlackBerry disclosed that it would book nearly a billion dollars in losses related primarily to the writedown of unsold BlackBerry Z10 touchscreen smartphones, and also lay off about 40 per cent of its employees in an effort to reduce costs.
The court filings outline numerous news releases issued by BlackBerry , as well as cite quarterly conference calls where it alleges executives “deceive the investing public.”
The lawsuit claims that the recent tumble in BlackBerry stock was a direct fallout from the executive’s misrepresentation of BlackBerry’s financial state.
“The timing and magnitude of BlackBerry’s stock price decline negates any inference that the loss suffered by the plaintiff and the other class members was caused by changed market conditions, macroeconoimc or industry factors,” the lawsuit alleges.
Since Sept. 20, when the company first disclosed the massive loss and layoffs, BlackBerry’s share price has tumbled 25 per cent on the NASDAQ in New York.
BlackBerry has faced numerous other class action lawsuits in the past.
In 2011, a U.S. judge threw out a suit claiming executives of the company, then known as Research In Motion, misled investors on its financial condition and the prospects of its devices, which included the failed launch of its PlayBook tablet. The case is being appealed by the plaintiffs.
Another class action lawsuit was filed the same year by Montreal-based law firm Consumer Law Group Inc. seeking refunds for the downtime caused by a massive BlackBerry service outage.
Read more Business News
|QHR Technologies Inc||1.26||+0.07|
|Anavex Life Sciences||0.38||0.00|
|Copper Mountain Mining||1.54||-0.01|
The bank manager just phoned and asked for full and immediate repayment of the line of credit because the latest, (and they were late!), financial statements showed continuing losses and falling sales...
Recently I recorded a video series for my keynote speaking business. It was called from Faith to Future. In one of the episodes, I talked about the concept of using hard work to get out of a difficul...
I saw your comment while reading your business article on Castanet regarding Harvey’s Hamburgers being the “Best Tasting Hamburgers". It is true, Harvey’s usually wins that awa...
- Transcontinental buys 74 Sun Media community papers in Quebec for $75M
- Canada's exporting sector expects to improve sales over next six months
- Sun Media sells 74 community papers
- Capital Power, Enmax to jointly develop new gas-fired plant near Edmonton
- Canadian Press NewsAlert: Tiff Macklem to step down from Bank of Canada
- US economy expands at 3.6 per cent rate in Q3 but business stockpiles drive half of the growth
- US jobless claims tumble 23,000 to 298,000, sign that companies are laying off fewer workers
- CIBC plans to open a branch at Pearson airport to draw in travellers, newcomers
- Transcontinental buying 74 Sun Media community papers in Quebec for $75 million
- RBC president and CEO Gordon Nixon to retire in Aug. 2014
- 'SpongeBob SquarePants,' other Nickelodeon programs come to China online viewers in Sohu deal
- Cost rises to $8.5B for North West refinery project northeast of Edmonton