BlackBerry Faces Shareholder Class Action

A class action lawsuit was filed in the U.S. District Court in the Southern District of New York on Friday against BlackBerry and some of its executives, including chief executive Thorsten Heins and chief financial officer Brian Bidulka.

The lawsuit claims that the company misled investors about their financial situation and inflating the stock value by misrepresenting how BlackBerry 10 would fare on the market against competitors. The proposed class would include shareholders who purchased stack between Sept. 27, 2012-Sept. 20, 2013.

The suit claims that BlackBerry was aware of these challenges and lay off about 40% of its workforce in this period. On Sept. 20, 2013, BlackBerry disclosed losses of $930-960 million due to poor sales of the BlackBerry 10. This resulted in a share drop of 24%, and the suit claims there are violations of the Securities and Exchange Act.

BlackBerry is currently facing a draft takeover by Fairfax Financial Holding Ltd.