RIM faces class-action lawsuit over claims it misled investors

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WATERLOO, ONT.— The Canadian Press
Last updated Friday, May. 27, 2011 8:41AM EDT

Research In Motion Ltd. (RIM-T42.70----%) says a class-action lawsuit has been filed against the company in the United States, alleging it misled investors.

The Waterloo, Ont.-based maker of the BlackBerry smart phone and PlayBook tablet device, said Friday that the suit claims RIM's leadership made materially false and misleading statements about its financial condition and business prospects over a four-month period ended April 28.

RIM said the lawsuit, filed in the U.S. District Court for the Southern District of New York, is seeking unspecified damages.

The company says it believes the allegations are without merit and that it will vigorously defend itself.

The lawsuit comes as RIM faces increased competition from Apple Inc. and others in the smart phone market.

In late April, the company cut its financial guidance for both earnings per share and revenue, saying that shipments of BlackBerry smart phones would likely be lower than initially expected.

The company also anticipates a lower average selling price for the devices.

Its PlayBook tablet made its debut to little fanfare in April, and the company has been criticized for being too slow to react to the young and highly competitive tablet market where Apple has a stranglehold with its iPad device.