UPDATE 1-U.S. appeals court sends BlackBerry lawsuit back to lower court

Wed Aug 24, 2016 10:50am EDT
 
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(Adds details on ruling, background on case)

By Nate Raymond

NEW YORK Aug 24 (Reuters) - A U.S. appeals court on Wednesday upheld the dismissal of a lawsuit accusing BlackBerry Ltd of fraudulently inflating its stock price by painting an upbeat picture of the prospects for its BlackBerry Z10 smartphone line that was misleading.

While the 2nd U.S. Circuit Court of Appeals in New York said the lawsuit failed to state a plausible claim, it ordered a lower-court judge to reconsider whether to let the plaintiffs amend their complaint in light of what they said was new evidence.

Neither BlackBerry nor a lawyer for lead plaintiffs Todd Cox and Mary Dinzik responded immediately to requests for comment.

BlackBerry launched its Z10 phone in January 2013 in a bid to recoup market share lost to Apple Inc's iPhone, and Samsung Electronics Co Ltd devices powered by Google Inc's Android.

The BlackBerry Z10 won positive reviews, but low sales led to a projected $930 million writedown for unsold inventory on Sept. 20, 2013. BlackBerry shares lost about one-sixth of their value that day.

The Waterloo, Ontario-based company ousted its chief executive officer, Thorsten Heins, less than two months later.

The lawsuit alleged that BlackBerry attempted to conceal the poor performance of the Z10 in order to artificially inflate its stock price.   Continued...