Kessler Topaz Meltzer & Check, LLP Alerts Investors of Lead Plaintiff Deadline in Securities Fraud Class Action Lawsuit Against PayPal Holdings, Inc.
Oct 15, 2021 10:44 AM ET
Legal Newswire POWERED BY LAW.COM
The law firm of Kessler Topaz Meltzer & Check, LLP announces that a securities fraud class action lawsuit has been filed against PayPal Holdings, Inc. on behalf of those who purchased or acquired PayPal securities betweeen February 9, 2017 and July 28, 2021, inclusive (the "Class Period").
PayPal is a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. PayPal's services include PayPal Credit and certain debit card services. In 2015, PayPal entered into a Stipulated Final Judgment and Consent Order (the "Consent Order") with the Consumer Financial Protection Bureau ("CFPB"), settling regulatory claims arising from PayPal Credit practices between 2011 and 2015. The Consent Order obligated PayPal to pay $15 million in redress to consumers and a $10 million civil monetary penalty. The Consent Order also required PayPal to make various changes to PayPal Credit disclosures and related business practices.
The Class Period commences on February 9, 2017, the day after PayPal filed an annual report on Form 10-K with the U.S. Securities and Exchange Commission ("SEC"), reporting the company's financial and operating results for the quarter and year ended December 31, 2016 (the "2016 10-K"). With respect to PayPal's disclosure controls and procedures, the 2016 10-K represented that, "[b]ased on the evaluation of our disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15d-15(e) under the [Exchange Act]), [the defendants] have concluded that as of December 31, 2016, the end of the period covered by this report, our disclosure controls and procedures were effective." The 2016 10-K purported to advise investors of PayPal's regulatory obligations and attendant risks, while simultaneously assuring investors of PayPal's "compliant solutions" to addressing those risks. With respect to the Consent Order, the 2016 10-K stated, in relevant part, that "[w]e continue to cooperate and engage with the CFPB and work to ensure compliance with the Consent Order, which "required PayPal to make various changes to PayPal Credit disclosures and related business practices."
Throughout the Class Period, defendants continued to assert the effectiveness of PayPal's disclosure controls and procedures; purported to advise investors on PayPal's regulatory obligations, attendant risks, and "compliant solutions" to addressing those risks; repeatedly asserted that it was remediating issues with its PayPal Credit business practices in accordance with the Consent Order; and downplayed regulations and related issues regarding PayPal's interchange rates.
The truth emerged on July 29, 2021, when PayPal filed a quarterly report on Form 10-Q, reporting PayPal's financial and operating results for the second quarter of 2021. Therein, PayPal disclosed investigations by the SEC and the CFPB. Specifically, PayPal disclosed receipt of a Civil Investigative Demand from the CFPB related "to the marketing and use of PayPal Credit in connection with certain merchants that provide educational services"; and that the company has "responded to subpoenas and requests for information received from the [SEC] relating to whether the interchange rates paid to the bank that issues debit cards bearing our licensed brands were consistent with Regulation II of the Board of Governors of the Federal Reserve System, and to the reporting of marketing fees earned from the Company's branded card program."
Following this news, PayPal's stock price fell $18.81 per share, or 6.23%, to close at $283.17 per share on July 29, 2021.
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) PayPal had deficient disclosure controls and procedures; (2) as a result, PayPal's business practices with respect to PayPal Credit remained non-compliant; (3) PayPal's practices regarding payment of interchange rates related to its debit cards were likewise non-compliant with applicable laws and/or regulations; (4) accordingly, PayPal's revenues derived from its PayPal Credit and debit card practices were in part the subject of improper conduct and thus unsustainable; (5) all the foregoing subjected PayPal to an increased risk of regulatory investigation and enforcement; and (6) as a result, PayPal's public statements were materially false and misleading at all relevant times.
PayPal investors may, no later than October 19, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)
Tags: Wire, Classaction-Marketing, Legal Newswire, United States, English