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October 07, 2013

Shareholders File Lawsuit Against BlackBerry

Shareholders have filed a class action lawsuit against BlackBerry. The lawsuit claims that the company misled investors about its future, including how the Blackberry 10 smartphone line would fare against its competitors.

The lawsuit was filed in a Manhattan court on Friday by shareholder Marvin Pearlstein. BlackBerry's CEO Thorsten Heins and chief financial officer Brian Bidulka are named in the lawsuit as defendants.

Pearlstein claims that BlackBerry misled its investors last year by saying that the company was "progressing on its financial and operational commitments,” and that, "previews of its BlackBerry 10 platform were well received by developers."

The complaint alleges that, “in reality, the BlackBerry 10 was not well received by the market, and the company was forced to…lay off approximately 4,500 employees, totaling approximately 40 percent of its total workforce.” 

The lawsuit seeks to represent thousands of shareholders who purchased BlackBerry stock between Sept. 27, 2012, and Sept. 20, 2013. This is the time period that the lawsuit claims that executives misrepresented the state of BlackBerry's operations.

Last month BlackBerry disclosed that it would book nearly a billion dollars in losses. These losses are primarily related to the write down of unsold BlackBerry Z10 touchscreen smartphones.

The court filings list a number of BlackBerry press releases, as well as quarterly conference calls where executives allegedly "deceive the investing public." The suit also claims that the recent fall of BlackBerry stock was directly related to the executives’ 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, macroeconomic or industry factors,” the suit alleges.

BlackBerry’s share price has fallen 25 percent on the NASDAQ in New York since the company disclosed massive loss and layoffs back on Sept. 20.

BlackBerry is not new to lawsuits; it has faced numerous other class action suits in the past.




Edited by Alisen Downey


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