Microsoft Sued for Lying About Surface RT Sales

Microsoft is going from bad to worse when it comes to the Surface RT tablet. After being forced to announce a $900 million (€780 million) write-down to adjust inventories due to unsold tablets across the world, Microsoft is now being sent to the court for lying about Surface RT sales.

Law firm Robbins Geller Rudman & Dowd, which filed the lawsuit on behalf of Gail Fialkov, said in a statement that the Redmond-based tech giant has provided false and misleading statements about the Surface RT tablet.

What’s more, the lawsuit documents are mentioning CEO Steve Ballmer, CFO Peter Klein, Corporate Vice President Frank Brod, and former marketing boss for the Windows division Tami Reller as defendants, claiming that they all lied about how the tablet performed on the market.

Here are a few excerpts from the lawsuit papers submitted to the United States District Court for the District of Massachusetts:

“Defendants issued materially false and misleading statements regarding the Company’s financial performance and its tablet computer, the Surface RT. Specifically, defendants misrepresented and failed to make public the following adverse facts:

(i) that the Company’s Surface RT product was experiencing poor customer demand and lackluster sales;

(ii) that the Company’s Surface RT inventory experienced a material decline in value during the quarter ended March 31, 2013;

(iii) that the Company’s financial statements for the quarter ended March 31, 2013 were materially false and misleading and violated Generally Accepted Accounting Principles and Microsoft’s publicly disclosed policy of accounting for inventories;

(iv) that the Company’s Form 10-Q for its third quarter of 2013 failed to disclose then presently known trends, events or uncertainties associated with the Surface RT product that were reasonably likely to have a material effect on Microsoft’s future operating results;

(v) that based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s Surface RT product during the Class Period.”

Microsoft is yet to roll out a statement on this, but we’ve reached out to the company, so we’ll publish an update for the article when and if we get an answer.