Securities Fraud Lawsuit Filed against Research In Motion

Atlanta, GASometimes, allegations about securities fraud are made against individuals who are reportedly involved in stock fraud. But sometimes, securities fraud litigation is undertaken against large companies, who are alleged to have made false and misleading statements about their financial status. In such cases, investors can file lawsuits against the companies and some directors, alleging securities fraud.

Research In Motion Ltd. faces allegations that the company misled its investors about its financial condition. Research In Motion, maker of the BlackBerry smartphone and the Playbook tablet, is alleged to have made false and misleading statements from December 16, 2010 through April 28, 2011, about business prospects and the company's financial status. A lawsuit has been filed on behalf of anyone who bought stock in Research In Motion (sometimes referred to as RIM) during that time.

According to the lawsuit, as quoted by The Associated Press (05/29/11), Research In Motion "failed to inform investors that its aging product line and inability to introduce new products to the market was negatively impacting the company's business and margins." Furthermore, the lawsuit alleges that Research In Motion knew about problems with products and product launches that would result in shipments declining and hurt company earnings.

According to CTV News (05/27/11), the plaintiffs further alleged that Research In Motion and its directors "issued materially false and misleading statements regarding the Company's financials and business prospects."

Research In Motion reportedly responded to the lawsuit saying that the allegations were "without merit." The lawsuit seeks unspecified damages.

Meanwhile, a class-action securities lawsuit against Countrywide Financial has been reinstated by a California state appellate court. The lawsuit was dismissed by a state court because it was filed in state court but made claims under federal law. According to Reuters (05/19/11), the appellate court reinstated the lawsuit because the securities involved were not traded on a national exchange.

The lawsuit was filed on behalf of investors who purchased Countrywide mortgage-backed securities, including several pension funds, and alleged the company gave false and misleading information regarding its financial status. That false and misleading information reportedly resulted in investors buying the securities. Pensions & Investments (05/20/11) reports that among the plaintiffs in the lawsuit are the Vermont Pension Investment Committee, Washington State Plumbing & Pipefitting Pension Trust and Maine State Retireme