TORONTO—A class action lawsuit has been filed against BlackBerry Ltd. over allegations management misrepresented market perception of the company’s new line of smartphones.
Filed by Merchant Law Group LLP on behalf of Canadian shareholders who bought stock in the company between Sept. 27, 2012, and Sept. 20, 2013, the legal action comes in the midst of buyout talks of the Waterloo, Ont.-based company and massive financial losses expected on the horizon.
The lawsuit is seeking more than $900-million in damages.
It centres on the tech giant’s BlackBerry 10 operating system and its latest line of devices.
Touted as the savior of BlackBerry, the operating system was a flop and has led to an anticipated writedown of close to $1-billion as thousands of unsold devices sit on shelves.
But, the lawsuit contends, the writing was on the wall and senior management knowingly or negligently misrepresented the market perception of the BlackBerry 10.
“Canadians who invested in BlackBerry in the past year have lost hundreds of millions of dollars,” Tony Merchant, whose law firm launched the legal action. “For almost a full year, BlackBerry management made market statements based on prophecy rather than the actual circumstances.”
The lawsuit also alleges management misrepresented the company’s financial position.
The lawsuit contains allegations not tested in a court of law.