By Nate Raymond
NEW YORK, March 29 A U.S. shareholder lawsuit accusing
smartphone manufacturer BlackBerry of seeking to fraudulently
obscure its falling market position was dismissed on Friday.
U.S. District Judge Richard Sullivan in Manhattan granted the company's
motion to dismiss the proposed class-action lawsuit, finding the plaintiffs
failed to adequately allege that the company or various executives had made
deliberate and material misstatements.
Sullivan said BlackBerry clearly had failed to keep pace with rivals in
developing smartphones and information technology, and the defendants "have paid
a price for their mistakes by way of demotions, terminations and sizable
"Nevertheless, corporate failings alone do not give rise to a securities
fraud claim," Sullivan said.
David Brower, a lawyer for the plaintiffs at Brower Piven, declined comment.
A spokeswoman for BlackBerry did not immediately respond to requests for
BlackBerry, known as Research In Motion Ltd until recently, has sought to
achieve a turnaround its new Z10 smartphones after years of losing market share
as consumers moved to Apple Inc's iPhone as well as smartphones using
Google Inc's Android software.
The lawsuit, filed in 2011 by investor Robert Shemian, sought to recover
losses on behalf of U.S. shareholders who bought the company's stock from
December 2010 through June 2011.
The lawsuit followed a series of setbacks the company suffered in 2011. The
complaint cites slowing sales of its aging BlackBerry phone product line, delays
in releasing a new operating system and a botched launch of its first tablet.
The lawsuit contended all those setbacks were known by the company and its
executives, who nonetheless allegedly began misleading investors, who bought its
stock at inflated prices.
From Feb. 11, 2011 to June 17, 2011, when the company announced
disappointing earnings and announced layoffs, the company's stock slid from
$69.86 to $27.25.
The case is Shemian v. Research In Motion Limited, U.S. District Court,
Southern District of New York, No. 11-04068.