BlackBerry Ltd.’s 2013 claim that false sales data in a research report sent its stock tumbling coincides with details in a new criminal complaint against a former wireless retail executive accused of selling industry secrets.
Prosecutors declined to confirm the name of the company allegedly victimized by James Dunham, of Glastonbury, Conn. Dunham, 59, was arrested Thursday and charged with mail fraud and wire fraud over claims he sold corporate secrets to a research analyst for years for $2,000 a month.
Shares of an unidentified smartphone maker tumbled more than 7 percent in a day after a financial firm issued a report on April 11, 2013, saying that product returns for a recently introduced handset exceeded sales, Boston U.S. Attorney Carmen Ortiz said Thursday in a statement. The U.S. didn’t identify the financial firm or Dunham’s employer.
BlackBerry, based in Waterloo, Ontario, said on April 12, 2013, that a research report a day earlier by Boston-based Detwiler Fenton & Co. contained false information about customer returns of Z10 devices in a deliberate attempt to manipulate its stock price. BlackBerry’s stock fell 7.8 percent on the sales news and the company called for a regulatory probe.
Dunham, who worked at the wireless services retailer from 2009 to 2013, faces as long as 20 years behind bars on each of the two counts. He appeared in Boston federal court Thursday.
“Mr. Dunham has undermined the credibility and efficiency of capital markets in favor of lining his own pocket,” Vincent Lisi, a special agent with the Federal Bureau of Investigation in Boston, said in the statement.
Dunham’s lawyer, Conrad Bletzer, didn’t immediately return a call or e-mail seeking comment on the charges.
Adam Emery, a spokesman for BlackBerry, didn’t respond to calls or emails seeking comment on the charges. Peter Fenton, the chief executive officer of Detwiler Fenton, didn’t immediately comment when reached by phone and said someone would return the call later.
The franchisor where Dunham worked is one of six exclusive national retailers that sell the smartphone maker’s devices, according to the complaint.
Detwiler Fenton said in the April 2013 paper that some of BlackBerry’s “key” U.S. retail partners saw a “significant” increase in Z10 returns, with returns exceeding sales.
Dunham’s boss wasn’t aware of his consulting arrangement with the research firm until the FBI visited his company’s offices to interview Dunham in September 2013, according to the complaint. Dunham quit after the interview.