One day after announcing its first profitable quarter in two years, Research in Motion Ltd. (now BlackBerry) fended off claims that it misled investors about its faltering market position. In a 27-page March 29 decision, Shemian v. Research In Motion, 11 Civ. 4068, Southern District Judge Richard Sullivan (See Profile) dismissed a proposed securities fraud class action brought on behalf of individuals who bought RIM stock between December 2010 and June 2011. He ruled that investors, who saw the company’s stock price dive 60 percent, couldn’t point to any actionable misstatements by RIM executives or any intent by the company to defraud shareholders.
RIM’s stock price peaked at $70 a share in February 2011, soon after the company announced 5.1 million new BlackBerry subscribers and 40 percent revenue growth. In the following months, RIM cofounder Jim Balsillie made statements to investors like "we feel fantastic about the future of the company" and "the business is growing fast." RIM executives also touted the company’s new Playbook tablet, which hit the market early that year, as a "winner." But the Playbook flopped amid shipment delays and negative reviews, and BlackBerry’s share of the smartphone market continued to erode.
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