RIM is sued for allegedly deceiving investors

A CLASS ACTION LAWSUIT has been filed against the Canadian Blackberry maker Research In Motion (RIM) for allegedly deceiving investors.

The lawsuit was filed in the US District Court for the Southern District of New York, and it claims that RIM and some of its executives made materially false and misleading statements about the financial condition and business prospects of the company, according to Reuters.

The plaintiff investors allege that the deception took place between 16 December of last year and 28 April of this year. It's not clear exactly how RIM supposedly misled investors, but it's likely the complaint claims that RIM valued the company higher than it was really worth in a move to improve its market standing.

Shareholders are seeking unspecified damages, believing they should be compensated for investing in a company they were led to believe was performing better than it really was.

RIM has been sued in the past for patent infringement and stealing staff from other companies, but this is the first time its own investors have turned against it. The seemingly unending troubles in India and other countries over its encrypted services might have soured feelings amongst shareholders.

The limited appeal of the Playbook tablet in contrast to the success of the Ipad and several Android models might also be a factor. RIM has backed itself into the enterprise market, where it plays to its strengths, but this has meant effectively giving up on the consumer market ruled by Apple and Google. Such an approach cannot go down well with investors, who would like to see RIM reclaim its former glory in the early smartphone days.

The company claims the allegations are "without merit" and said it will "vigorously defend" itself in court. Court dates have yet to be set, but this class action lawsuit and any appeals could drag on for years. µ