Former Wireless Zone exec provided insider knowledge on BlackBerry woes
A former wireless retailer executive was sentenced to five months in prison after being found guilty of selling insider information about device-maker BlackBerry in 2013 to an analyst. That information was reportedly used as the basis for a negative report on BlackBerry, which resulted in the company’s stock taking a hit.
According to a Reuters report, former Wireless Zone COO James Dunham formed a consulting relationship in 2010 with an analyst at Boston-based Detwiler Fenton to provide insider knowledge for $2,000 per month. That relationship led to Dunham providing insight into reliability issues on a new BlackBerry device, which the story said matched the description of the BlackBerry Z10 smartphone. BlackBerry’s stock price dropped 7% after the analyst firm put out a research note with the information.
Dunham, who in 2009 was named CSO at Wireless Zone, in June pled guilty to wire fraud. In addition to the five-month prison term, Dunham was sentenced to five months of home confinement and required to pay a $76,000 fine.
Connecticut-based Wireless Zone was formed in 1988 as Car Phone Store, and claims to be Verizon Wireless’ largest independent franchise retailer.
BlackBerry launched the Z10 in early 2013, pinning its hopes on the touchscreen device turning around what had been a significant drop in the device-makers smartphone fortunes. Initial carrier sales were delayed six weeks for what at the time was suggested as carriers giving higher testing priority to Samsung’s Galaxy S4 device.
Soon after the Z10 launch, analysts reported that BlackBerry controlled less than 3% of the smartphone market it had at one time dominated, with analysts claiming the company had slashed order expectations to fewer than 1 million per month.
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