A US law firm is probing whether BlackBerry maker Research In Motion (RIM) deliberately kept its shareholders in the dark about its problems in releasing new smart phones to replace its old devices.
RIM shares tanked April 29 after the Waterloo-based Canadian wireless giant slashed quarterly outlook on sluggish sales of high-end devices, forcing market analysts to downgrade its stock.
Though co-CEO Jim Balsillie called the revised outlook ‘hyper turbulence’ in the smart phone market and unveiled BlackBerry Bold 9900 and 9930 – the thinnest and most powerful smart phones ever – a week later, investors have not stopped dumping the RIM stock which is hovering around $42, the levels seen not since late 2006.
Investors are jittery as new RIM devices will hit the market – where it is fast losing share to Apple and Google Android devices until next year.
The Atlanta firm Holzer Holzer & Fistel, LLC says it is investigating whether RIM misguided its shareholders about problems in replacing its aging handset line-up.
"The investigation focuses on whether a series of statements made between December 16, 2010 and April 28, 2011, inclusive, regarding RIM’s business, its prospects and its operations were materially false and misleading at the time they were made," the US firm said in a statement to the daily National Post.
The law firm, which in March also investigated statements by Palm Inc. before it was bought by Hewlett-Packard last month for $1.2 billion, said: "Specifically, the investigation focuses on, among other things, whether the company (RIM) knew but failed to adequately disclose that it was experiencing problems associated with an aging product line which were negatively impacting RIM’s business and margins."
The law firm has reportedly asked those who bought RIM common shares between December and April to contact it to help in investigations.
RIM declined comment, telling the Post that "it is RIM’s standard policy to decline comment on potential litigation".
Toronto-based Ontario Securities Commission had slapped heavy fines on RIM co-CEOs Jim Balsillie and Mike Lazaridis and barred them from serving on the company’s board for a year over a stock option accounting scandal in 2009.(IANS)