Marvin Pearlstein Files Class Action against Blackberry
Canadian smartphone maker BlackBerry faces potential investor action after one of its main shareholders sued the company, its chief executive (CEO) and chief financial officer (CFO) alleging that its share price had been inflated.
San Francisco lawyer Marvin Pearlstein, of the firm Manatt, Phelps & Phillips, leads a class action filed in Manhattan accusing BlackBerry, Thorsten Heins, its CEO, and Brian Bidulka, its CFO, of deceiving investors about the potential for its Blackberry 10 smartphone devices and the company’s wider prospects.
According to the lawsuit, BlackBerry, formerly known as Research In Motion, misled 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.
However, it continues, Blackberry failed to inform investors that “the company was not on the road to recovery and re-emerging as a lead player in the wireless communications industry. In reality, the BlackBerry 10 was not well-received by the market.”
Pearlstein wants to act on behalf of investors who bought shares in BlackBerry between 27 September 2012 and 20 September 2013, when the company revealed it was cutting 4,500 jobs and that second quarter revenues were sharply lower.
BlackBerry, once a major player in the smartphone market, saw the appeal of its products wane in recent years as consumers switched to touchscreen handsets. The company announced in August that it was exploring strategic options, including putting itself up for sale, and has since tentatively agreed to be bought by a consortium led by one of its investors for US$4.7bn.
Other potential suitors have, however, since emerged and reports suggest that Google, software group SAP and Cisco Systems are in talks with BlackBerry about either buying all or part of the company.