U.S. appeals court sends BlackBerry lawsuit back to lower court
- Wall St. set to open lower, weighed down by GE
- British American Tobacco Offers to Acquire Remaining Shares of Reynolds American (RAI) for $56.50/Share
- General Electric (GE) Tops Q3 EPS by 2c; Updates FY16 EPS Outlook
- Pre-Open Stock Movers 10/21: (ALKS) (RAI) (PFPT) (MSFT) Higher; (SGY) (TWLO) (RRGB) Lower (more...)
- Oil rises on Russia's output freeze commitment
A Blackberry smartphone is displayed in this August 12, 2010 illustrative photo. REUTERS/Bobby Yip/Files
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
By Nate Raymond
NEW YORK (Reuters) - A U.S. appeals court on Wednesday upheld the dismissal of a lawsuit accusing BlackBerry Ltd of fraudulently inflating its stock price by painting an upbeat picture of the prospects for its BlackBerry Z10 smartphone line that was misleading.
While the 2nd U.S. Circuit Court of Appeals in New York said the lawsuit failed to state a plausible claim, it ordered a lower-court judge to reconsider whether to let the plaintiffs amend their complaint in light of what they said was new evidence.
Neither BlackBerry nor a lawyer for lead plaintiffs Todd Cox and Mary Dinzik responded immediately to requests for comment.
BlackBerry launched its Z10 phone in January 2013 in a bid to recoup market share lost to Apple Inc's iPhone, and Samsung Electronics Co Ltd devices powered by Google Inc's Android.
The BlackBerry Z10 won positive reviews, but low sales led to a projected $930 million writedown for unsold inventory on Sept. 20, 2013. BlackBerry shares lost about one-sixth of their value that day.
The Waterloo, Ontario-based company ousted its chief executive officer, Thorsten Heins, less than two months later.
The lawsuit alleged that BlackBerry attempted to conceal the poor performance of the Z10 in order to artificially inflate its stock price.
In Wednesday's decision, the 2nd Circuit upheld U.S. District Judge Thomas Griesa's March 2015 dismissal of the lawsuit for the failure to allege that BlackBerry and its executives knowingly misled investors.
The three-judge appeals panel said the plaintiffs' claims amounted to "fraud by hindsight" by saying that the defendants must have known the device would be unsuccessful.
The court nonetheless said the plaintiffs could try to persuade Griesa to let them amend their complaint in light of new legal developments and evidence that the plaintiffs said would support their claims.
The appeals court said if Griesa refuses to let the plaintiffs amend their complaint, he should explain his reasons, which he had not done before.
The case is Cox v. BlackBerry Limited, 2nd U.S. Circuit Court of Appeals, No. 15-3991.
(Reporting by Nate Raymond in New York; Editing by W Simon and JS Benkoe)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Credit Suisse says reaches 109.5 million euro settlement with Italy
- Lions' den or nest of doves? May's first EU encounter was businesslike
- British PM May says Brexit talks with EU will take time
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!