A US lawsuit, alleging that BlackBerry was illegally inflating its stock price by presenting a misleading perception of the future of BlackBerry 10 smartphones, was dismissed for the Canadian smartphone company.
The prosecution consisting of shareholders, led by Marvin Pearlstein, claimed that BlackBerry overstated its success in terms of consumer acceptance. The company was accused of manipulating records by calculating funds in its favour – the prosecution stated that BlackBerry and top officials falsely claimed that the BlackBerry 10 devices were selling well, and failed to take writedowns when it was proven otherwise.
Thomas Griesa, US District Judge, said that the prosecution’s inability to prove the substance of its accusation was what led to the dismissal of the lawsuit, adding that the assertions made by BlackBerry “fell far short” of what would meet the criteria for being “legally misleading”, and said that “even a poor-selling device may still be embraced by customers and may still mark a transition for the company.”
BlackBerry 10 was launched in January 2013, and the revamped OS with its brand new devices received favourable reviews. Although, low sales resulted in a projected $930 million loss for the company, and BlackBerry lost one-sixth of its value that day.