A class action lawsuit against BlackBerry Ltd. is demanding financial compensation on behalf of Canadian shareholders who bought stock between September 2012 and September 2013, saying the company did not declare the full extent of its financial difficulty to retail investors.
The lawsuit was launched Tuesday in Quebec Superior Court. It is the second class action lawsuit on behalf of shareholders, following one launched in New York on Oct. 5.
"For almost a full year, BlackBerry management made market statements based on prophecy rather than fact. Thousands of Canadians who invested in BlackBerry Ltd. in the past year have lost hundreds of millions of dollars." said Tony Merchant, the lawyer representing current and former BlackBerry shareholders.
The class action lawsuit alleges that BlackBerry senior management misrepresented how well the BlackBerry 10 line of smartphones was received by consumers and the public.
It also alleges the full extent of BlackBerry’s financial trouble wasn’t revealed until Sept. 20, 2013, when the company announced a writedown of close to $1 billion in the third quarter and said it would lay off 40 per cent of its workforce.
In January 2013, BlackBerry stock was trading at $17.80 per share on the TSX. On Sept. 19, its closing price was $10.82 per share, but with after the downgrade in earnings forecast on Sept. 20, shares slipped over the next five days to $8.26.