A U.S. judge has thrown out BlackBerry’s bid to dismiss a long-running lawsuit claiming it defrauded shareholders by inflating the success and profitability of its BlackBerry 10 smartphones, and said the class-action case could go to trial this fall.
U.S. District Judge Colleen McMahon in Manhattan said “genuine issues of material fact” remained in dispute in the more than eight-year-old case, including over BlackBerry’s accounting, and that “battle-of-the-experts” issues precluded her from ruling for one side or the other.
McMahon said that while criminal trials will maintain precedence over civil trials in her courthouse during the COVID-19 pandemic, she would “prioritize” the BlackBerry case because of its age.
The judge said her “best guess” was a trial could begin in September or October.
In her 24-page decision, McMahon did strike four alleged BlackBerry misstatements from the case, saying the shareholders waited too long to object to them.
Other defendants include former BlackBerry Chief Executive Thorsten Heins, former Chief Financial Officer Brian Bidulka and former Chief Legal Officer Steve Zipperstein.
Back in March of 2015, BlackBerry wonthe dismissal of a U.S. lawsuit accusing it of fraudulently inflating its stock price by painting a misleadingly upbeat picture of the prospects for its BlackBerry 10 smartphones.
McMahon said then that new information had surfaced since the lawsuit was dismissed in 2015, and the US Supreme court had changed the legal standard for assessing whether opinions are misleading.
In September 2015, a former wireless retail executive was sentenced to five months in prison for selling confidential industry information to an analyst whose subsequent 2013 report on sales of BlackBerry’s Z10 sent the company’s stock price downward.
BlackBerry and its lawyers did not immediately respond to requests for comment. The shareholders’ lawyers did not immediately respond to similar requests.