back to article Investor lobs sueball at BlackBerry, says it 'misled' shareholders

A BlackBerry shareholder has filed a lawsuit accusing the company and its chief exec and CFO of inflating its share price with unrealistic promises about BB10, leading to thousands of investors getting burnt. The suit was filed in federal court in Manhattan, New York, by one Marvin Pearlstein, in the names of "thousands" of …


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  1. Anonymous Coward
    Anonymous Coward

    "Lack of precognition is not a crime"

    Well... unless you're an Italian geophysicist...

    At any rate, what would this guy have preferred BB to say? "Man, this smoldering piece of shit is D-O-A! Sell, sell, sell - our finger's on the handle and this toilet's about to flush, baby!"? I'm not sure that would have resulted in a terribly positive outcome for investors either...

    1. Def Silver badge

      I'm not convinced suing an ailing company is the best way to help them turn their fortunes around either. If you're not part of the solution, and all that...

      1. Thesheep

        As a shareholder

        He probably isn't interested in turning the company around, just making money - any way he can.

        1. Gio Ciampa

          Re: As a shareholder

          Presumably by ignoring the "share price may go down" part of the investment risk-taking...

        2. Anonymous Coward
          Anonymous Coward

          Re: As a shareholder

          Probably all the recent Longs that are kicking themselves that they should have purchased Nokia.....

          1. Anonymous Coward
            Anonymous Coward

            they should have purchased Nokia

            Didn't Elop drive the share price down 60% during his tenure?

            Sure if you bought Summer 2012 and sold now you'd be happy, but the share price is still about 35% lower today than it was in September 2010 when Elop started.

            1. Anonymous Coward
              Anonymous Coward

              Re: they should have purchased Nokia

              "Didn't Elop drive the share price down 60% during his tenure?"

              Elop rescued Nokia from a death spiral.

              Not that selling the devices unit is such a good deal for share holders though now that Windows Phone is the fastest growing OS....and Nokia are forecast back into profit anyway....

              1. NeilMc

                Re: they should have purchased Nokia

                So are you saying that sometime ago Microsoft decided Nokia was an aquisition target.

                Did they plant Elop in there as a Trojan Horse to get the full skinny on whether it was a financially attractive target.

                He may have advised Microsoft to only go for the Device's business unit as the rest had no real value to Microsoft.

                Maybe in return for his "vast" Golden Handcuffs payout from his Microsoft contract and his Golden Hello return to Microsoft contract Elop might have been tasked with driving the Nokia Share price down 60%.

                This could have in effect funded the purchase price of Nokia Devices for Microsoft.......

                Anything underhanded about that?.............

                All above board?............

                Nokia shareholders disadvantaged?............

                Wonder if Mr Pearlstein backed this horse as well?

                next claim in his pipeline perhaps

        3. Anonymous Coward
          Anonymous Coward

          As an Investor

          He's pretty crap at his job.

          BB clearly needed more than one decent phone to turn that mess around.

          Anyone who invested in them last Sept is some kind of idiot.

      2. Andrew Moore Silver badge

        yes but now the investors know what the rest of us have known for the last 4-5 years and they want their money back.

      3. Brenda McViking

        Sue them

        They may be shareholders but having been in a position of a shareholder where the board lied to you, it's not so much about recovering the money you lost as attempting to send a message that if you lie about your company to those people who own it, then you'll pay the consequences as damn well you should.

        Risk is part and parcel of company ownership, and you accept that as a shareholder, but in order to manage that risk and your exposure, the shareholders elect the board to inform them of the companies doings. When they lie, they should be strung up for it - as they are guilty of negligence, and it pretty much amounts to saying "everything is fine, keep paying me." Considering just how much these board members are paid to do their job, which is to act in the interests of shareholders, not against them, when they don't do it then they should be expected to be defending themselves in court with pretty hefty sanctions being applied if they lose.

        So no, it's not about reviving the companies fortunes, it's about removing freeloading parasites who will say anything to keep being paid for another month even though they know that the company is finished. (PS, I'm not a BB shareholder so I don't really care in this instance, but just giving you my views of why somebody might take this sort of action|)

        1. Tom 38 Silver badge

          Re: Sue them

          The company didn't lie, they honestly thought BB10 would be a success. Investing is about taking what the companies say, taking what analysts say, understanding how the customers react and making assessed decisions based on that information.

          This guy bought BB when it was clear to everyone they were dying, and now he wants his money back. Investing is a zero sum game, for people to win, others have to lose. This guy is a loser. Suck it up, princess.

      4. Anonymous Coward
        Anonymous Coward

        Oh c'mon Def.

        Why can't Americans sue over positive marketing verbage that turns out to be so much B.S.? Apple has 130 Billion in the bank. We can make a cool billion for "It just works" alone. :)

    2. MattEvansC3

      Not quite that level but they do have to set realistic expectations of performance.

    3. John Smith 19 Gold badge
      Thumb Up

      @David W.

      "Man, this smoldering piece of shit is D-O-A! Sell, sell, sell - our finger's on the handle and this toilet's about to flush, baby!"

      Quality work.

      Sadly I feel such subtle hints may not have been direct enough for some investors. What I believe they call in the investment trade stupid.

  2. Don Jefe

    Wrong Target?

    Modern tech marketing is not a one player game. In fact, I would argue that 3rd parties do more to hype a company or product than the manufacturer itself.

    Companies like Gartner and IDC take statements from CEO's and balloon the thing into a near fiction. They make assessments and predictions based on next to nothing, push their view onto investors/brokers and don't take any of the flack when their unfounded assessments fail to materialize.

    Analysts predictions always get more press than the boring statements from senior management. That's because they deliver figures that can be measured, unlike most corporate statements.

    Either analysts are important partners in making assessments and weighting markets or they are not. If they are important they should be on the hook for the validity of their information. If they are not important they should be ignored, they'll go away on their own. Having it both ways simply shows a lack of commitment on their part. A lack of faith in their own information.

  3. Richard Jones 1

    Unsecured vs Secured Creditor

    I guess they felt that as a shareholder they were an unsecured creditors, but that as a party to litigation they might rank more highly in the cash claim queue. As others have said, all shareholders would have an arguable cases had the company not tried to talk up its new product. Given a foibles of the US legal system they possible think that their US$ x stake could earn an award payment of many times US$x.

    The risk is that a long drawn out case could see them recover nothing at all as such lawsuits are a great way to kill of any lingering chance of any recovery. Could it be a case of bullet meet foot?

    1. MattEvansC3

      Re: Unsecured vs Secured Creditor

      But there is no recovery, Blackberry is being marketted as a snatch and grab to various parties. When the company is broken up and sold off in pieces then there is no longer a company for the shareholders to get their money back from. Best they can hope for is to litigate and stall the sell-off while it goes through the court.

  4. wowfood

    So wait

    If I go into a casino, and they say "The odds of winning roulette are 1 in 8 if you bet here" and I bet there 8 times and fail to win each time. Can I sue them for misleading me into thinking I'd get my money back and then some?

    I mean I always viewed the stock market as "intelligent high stakes gambling"

    1. sabroni Silver badge

      Re: I always viewed the stock market as "intelligent high stakes gambling"

      It's not "intelligent", it's just "high stakes gambling".

      1. CheesyTheClown

        Re: I always viewed the stock market as "intelligent high stakes gambling"

        I disagree... an intelligent stock market investor would identify means of altering the value of a share and no gambling at all. I know it is supposed to be illegal, but that's only an issue if you get caught doing it.

        1. Anonymous Coward
          Anonymous Coward

          Re: I always viewed the stock market as "intelligent high stakes gambling"

          it is always gambling because you don't know when some other punter is going to dump their stocks and drive the price down...

  5. P Saunders

    Train smash

    If he didn't see the train smash that is currently Blackberry that just about every other human being on Earth did, maybe he should stay out of the stock markets.

  6. Anonymous Coward
    Anonymous Coward

    Did anyone seriously think BB had any future ?

    1. amanfromMars 1 Silver badge

      Cowardly pussies are not what Canucks need leading*

      Did anyone seriously think BB had any future ? .....Anonymous Coward Posted Monday 7th October 2013 13:05 GMT

      Well, many didn't expect them to roll over and surrender without a fight and leave their troupers without ammunition to wage greater intelligent virtualware war games against mediocre global opposition, AC. Would BB10 phone holders be due a full refund for a grave mis-selling operation and/or be entitled to a free transfer to another mobile phone operating system? Or do customers not matter a jot?

      *Although maybe top management had nothing novel and game-changing to offer ie they be intellectual property bankrupt

    2. CheesyTheClown

      Yes they did

      I met many people who loved their BlackBerrys and wouldn't have anything else. They were sure that new BlackBerrys would catch on.

      On the other hand, they also wear suits... and actually think that's cool

  7. Annihilator
    Thumb Up


    Stokebroker: OK now before I execute this order, are you sure you understand the risks of stock ownership?

    Homer: Absolutely!

    Flash to scene in Homer's brain of 'We're in the money' chorus line in front of king-kong

    Homer: You heard the monkey, make the trade.

  8. HereWeGoAgain

    The value of share can do down as well as up

    But some people just them to go up up up and away!

    Alternatively, a fool and his money are soon parted.

  9. keith_w

    I am pretty sure every statement issued by BB (note, I am a shareholder, and a lot poorer than I used to be

    :-( ), includes the weasel words at the end that say that this is a forward looking statement and represents the beliefs and hopes of management and not facts. I'm pretty sure that this will get kicked out of court in no time flat, ok, in lawyer time, which will cost me even more money :-((.

  10. Daedalus Silver badge


    Lawsuits like this are routine. Some law firms will file suit A if the stock goes up, and suit B if it goes down. The object is to garner settlements, "get lost" money, and fees fees fees. Any shareholders actually involved can expect pennies in return.

  11. Anonymous Coward
    Anonymous Coward

    Let's get a posse

    I'm tired of these vermin management at BB, time to string 'em up.

    1. John Smith 19 Gold badge


      And I'm tired of AC's who sound like trolls or PR for lawyers.

  12. nsld

    the value of investments

    can go down as well as up.

    And if you purchased RIM and did even the most basic of due dilligence you knew it was a very risky bet.

    Two rules to follow, firstly do not risk thy whole wad and secondly buy on the way up, not on the way down!

  13. Henry Wertz 1 Gold badge

    "They may be shareholders but having been in a position of a shareholder where the board lied to you, it's not so much about recovering the money you lost as attempting to send a message that if you lie about your company to those people who own it, then you'll pay the consequences as damn well you should."

    People that had the board lie to them should be able to recover. However, BB did not lie, they actually thought they would recover the company's fortunes. Furthermore, I looked at the Sep 27, 2012 press release -- all it shows is BB10 gaining momentum and a few early adopters saying how much they like it. It makes no predictions whatsoever on future usage or popularity. Investors: ***PLEASE*** NOTE!!!! When a platform is new and has almost no users, *IT WILL SHOW HUGE PERCENTAGE INCREASES* in almost every stat, and this is meaningless is guessing how widely it'll be adopted by the public!

    This is why every statement of this type, from any company, has text like the following (this is actually from the Sep 27, 2012 press release, with another paragraph or two of text telling where to look up risk factors to the company and such.):

    " "Forward-looking statements in this news release are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used herein, words such as "expect", "anticipate", "estimate", "may", "will", "should", "intend", "believe", and similar expressions, are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry Limited in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances."

  14. Shane Kent

    USA, no wonder they are so...

    F-d. I have a Z10, in fact I am typing on it now over lte. As I said before on this site I have a iPad Surface Pro for apps, PCs for work, and want a phone that is a phone. And the Z10 is far better than an iToy or droid. Come on, IOS 6 gave better facecrook, and 7 gives? Droid, Google, Web stats, we know who you are, no thank you! I am typing on QNX and not some hack version of UNIX. BB10 should have done better, good luck suing them you economy sucking scum! Then back to the USA so you can finish her off, eh!p

  15. Ommerson

    This sounds equivalent to walking into a book-makers' shop, placing a £10 bet at 100-1 outsider and then asking for your money back when it loses.

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