 "BlackBerry accused of inflating shares with false claims")
BlackBerry Ltd and two executives were sued by an investor who alleges they artificially inflated the company's stock through false and misleading statements about the smartphone maker's success and prospects.
Marvin Pearlstein, an investor, alleges in a proposed class action, or group suit, filed on Friday in federal court in Manhattan that BlackBerry Chief Executive Officer Thorsten Heins and Chief Financial Officer Brian Bidulka engaged in a scheme to deceive investors about the company's health and prospects for the BlackBerry 10 product line of smartphones.
According to the suit, BlackBerry made false and misleading statements in a September 27, 2012, press release when it claimed the new phone would "drive improvements across the company." On a conference call that day with investors, Heins allegedly made statements that BlackBerry "continues to be a financially strong company and we're executing and delivering on our commitments," and that it "remains a strong, innovative and relevant player in the mobile computing world."
Adam Emery, a spokesman for Waterloo, Ontario-based BlackBerry, declined to comment on the lawsuit.
Shares inflated
The price of the company's stock was inflated through a series of misleading statements and information, Pearlstein alleges. Once the truth was disclosed, the company's share price fell, he said. BlackBerry fell 16 per cent in trading in Toronto on September 20.
The suit, seeks to include as plaintiffs shareholders who suffered unspecified damages after buying BlackBerry common stock from September 27, 2012, until September 20. It also alleges claims for misrepresentations to investors and the US Securities and Exchange Commission about the true nature of the company's operation, management and future business prospects as well as the true value of the company's common stock and alleges that Heins and Bidulka are liable for their wrongful conduct.
BlackBerry, coping with plunging sales and mounting red ink, is streamlining the business as it looks to seal a $4.7-billion buyout deal with its largest shareholder, Fairfax Financial Holdings Ltd.
The company agreed to the tentative offer last month after years of losing ground to Apple Inc. and Samsung Electronics Co. In addition to the job cuts, BlackBerry is writing down unsold phone inventory by almost $1 billion.
Marvin Pearlstein, an investor, alleges in a proposed class action, or group suit, filed on Friday in federal court in Manhattan that BlackBerry Chief Executive Officer Thorsten Heins and Chief Financial Officer Brian Bidulka engaged in a scheme to deceive investors about the company's health and prospects for the BlackBerry 10 product line of smartphones.
According to the suit, BlackBerry made false and misleading statements in a September 27, 2012, press release when it claimed the new phone would "drive improvements across the company." On a conference call that day with investors, Heins allegedly made statements that BlackBerry "continues to be a financially strong company and we're executing and delivering on our commitments," and that it "remains a strong, innovative and relevant player in the mobile computing world."
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"The company was not on the road to recovery and re-emerging as a lead player in the wireless communications industry," the plaintiff said in the complaint. "In reality, the BlackBerry 10 was not well received by the market and the company was forced to write down a nearly $1 billion charge related to unsold BlackBerry 10 devices and lay off approximately 4,500 employees, totalling approximately 40 per cent of its total workforce," according to the complaint.
Adam Emery, a spokesman for Waterloo, Ontario-based BlackBerry, declined to comment on the lawsuit.
Shares inflated
The price of the company's stock was inflated through a series of misleading statements and information, Pearlstein alleges. Once the truth was disclosed, the company's share price fell, he said. BlackBerry fell 16 per cent in trading in Toronto on September 20.
The suit, seeks to include as plaintiffs shareholders who suffered unspecified damages after buying BlackBerry common stock from September 27, 2012, until September 20. It also alleges claims for misrepresentations to investors and the US Securities and Exchange Commission about the true nature of the company's operation, management and future business prospects as well as the true value of the company's common stock and alleges that Heins and Bidulka are liable for their wrongful conduct.
BlackBerry, coping with plunging sales and mounting red ink, is streamlining the business as it looks to seal a $4.7-billion buyout deal with its largest shareholder, Fairfax Financial Holdings Ltd.
The company agreed to the tentative offer last month after years of losing ground to Apple Inc. and Samsung Electronics Co. In addition to the job cuts, BlackBerry is writing down unsold phone inventory by almost $1 billion.