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Update:
- A federal judge in California dismissed a class action lawsuit accusing PayPal and its executives of misleading its investors about a pair of federal investigations looking into its debit and credit offerings.
- U.S. District Judge Charles R. Breyer, in granting PayPal’s motion to dismiss the securities class action, ruled the complaint did not plausibly allege that the company had actually misrepresented anything.
- Judge Breyer also determined that the investors who filed the complaint had not alleged that PayPal had committed any regulatory obligation violations.
- Investors have argued they were harmed after PayPal’s stock price dropped after the company revealed they were under investigation by the U.S. Securities and Exchange Commission and the Consumer Financial Protection Bureau.
- The investors have been given 21 days to file an amended complaint.
False PayPal Reports Class Action Lawsuit Overview:
- Who: A PayPal investor has lodged a class action lawsuit against the digital payments company and its top executives.
- Why: The plaintiff claims the company filed false PayPal reports about its practices and compliance with securities law since 2017, inflating stock prices.
- Where: The class action lawsuit was filed in California federal court.
(Aug. 24, 2021)
An investor leads a class action lawsuit against digital payments company PayPal Holdings, Inc, its CEO, and its CFO claiming the company withheld damaging information from its reports from 2017 to 2021 that resulted in investment losses.
Lead plaintiff, Huei-Ting Kang, filed the class action lawsuit on behalf of himself and all others who bought PayPal stock between Feb. 9, 2017 to July 28, 2021. The class action lawsuit accuses the company of violating securities law by withholding or making misleading statements about its business, operations, and compliance policies.
Also accused in the class action lawsuit are Daniel H. Schulman, PayPal’s president, chief executive officer and director, and John D. Rainey, PayPal’s chief financial officer and executive vice president of Global Customer Operations. These executives had knowledge of the concealed information, as well as the power to disclose and/or correct the published information, according to the PayPal reports class action lawsuit.
PayPal Reports Allegedly Concealed Securities Fraud for Years
In 2015, PayPal settled regulatory claims with the Consumer Financial Protection Bureau (CFPB) related to its PayPal Credit business practices between 2011 and 2015, says Kang.
In its subsequent annual reports to the Securities and Exchange Commission (SEC) from 2017 to 2020, PayPal assured its customers and investors that it was working to remain compliant according to the settlement.
Only when PayPal filed its quarterly SEC reports in July 2021, did it disclose investigations by the SEC and CFPB, claims the plaintiff.
At this news, PayPal’s stock price fell 6.23 percent per share. This lessened the value of Kang’s and Class Members’ investments in the company, which they bought based on PayPal’s previous false and misleading company information, according to court documents.
The false PayPal reports investor class action lawsuit seeks payment of damages, pre-judgment and post- judgment interest, attorneys’ costs and other relief.
The digital payments company has faced legal action for more than just these allegedly false reports. In 2017, donors and nonprofits claimed that the PayPal Giving Fund failed to deliver charitable donations according to the donor’s express intentions.
In May, a New York woman lodged a lawsuit in New York federal court claiming that she was unable to access her sole source of funds and was subjected to excessive fees after signing up for a “no charge” prepaid PayPal debit card.
Have you invested in PayPal since 2017? Were you aware of PayPal’s alleged misguidance in its securities reports? Tell us about it in the comments below!
The plaintiff is represented by Jennifer Pafiti, Jeremy A. Lieberman, and J. Alexander Hood II for Pomerantz LLP.
The False PayPal Reports Investor Class Action Lawsuit is Kang v. PayPal Holdings Inc., et al., Case No. 3:21-cv-06468-CRB, in the U.S. District Court for the Northern District of California.
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9 thoughts onPayPal class action over federal investigations dismissed
Please add me to this lawsuit
Add me to this class action sued
Please add me
I will never use PayPal again
Were you able to be added to the lawsuit? I am in the same situation as this case. They are illegally holding my money and permanently limited my account and banned me with no justification, warning, or proof. How do we get added to this class action lawsuit?
Please delete comment as as on wrong paypal article.
Add me
Add me please
I received two fraudulent e-mails claiming that a charge of $799 payable to Geek Computer repair and would appear on my credit card via Paypal. I did not authorize these payments. Please add me
I received two of those as well but they were both for cat parts of some kind instead of computers. But all the same in the end really. It’s still fraud.