Yelp Investor Class Action Lawsuit Overview:
- Who: Yelp, Inc. executives have inked an $18 million settlement with a Yelp shareholder.
- Why: The shareholder claimed that a trio of current and former Yelp executives lied about the success of the company’s cost-per-click advertising system. The $18 million will go to Yelp.
- Where: The settlement is pending in California federal court.
A Yelp Inc. shareholder has asked a judge to approve an $18 million settlement with three of the review company’s executives after alleging the trio lied about how well the business was doing.
In a notice filed Jan. 28 in a California federal court, Yelp shareholder Nicholas R. Ingrao said he had reached a settlement with Yelp CEO Jeremy Stoppelman, former Chief Financial Officer Charles Baker and Chief Operating Officer Joseph R. Nachman.
The agreement sees Stoppelman, Baker and Nachman paying Yelp $18 million in cash plus the company will adopt a series of corporate governance reforms designed to enhance its internal controls and operations.
Ingrao sued the trio on behalf of Yelp, alleging the execs breached their fiduciary duty to the company.
In the filing, Ingrao said the parties had reached an agreement that provides “substantial monetary and non-monetary benefits to Yelp.”
Plaintiff Alleges Execs Made ‘Materially False and Misleading Public Statements’
Ingrao first filed his complaint to Yelp’s board on March 11, 2019, he said.
It alleged that in early 2017, the trio of executives engaged in an unlawful scheme in which they misled Yelp shareholders about the purported success of the company’s business and advertising model and its prospects for future revenue and earnings growth.
According to the filing, “in breach of their fiduciary duties of care, good faith, and loyalty,” the executives made a series of materially false and misleading public statements that severely damaged Yelp by exposing it to liability for violating the federal securities laws in a class action filed against Yelp and the executives in 2018.
Ingrao also alleged that, before the misconduct was revealed in a May 9, 2017 company announcement, Yelp’s co-founder Stoppelman sold artificially inflated shares of his personal Yelp stock holdings based on non-public information.
The members of Yelp’s board of directors who are not involved in the lawsuit unanimously approved the settlement on Thursday, according to the motion.
Meanwhile, Yelp must face another similar class action lawsuit alleging it made false and misleading statements to investors about its local advertising business, a judge ruled last year.
What do you think of this settlement with the Yelp executives? Let us know in the comments!
Ingrao is represented by Shawn Williams, Travis Downs III, Benny Goodman III and Erik W. Luedeke of Robbins Geller Rudman & Dowd LLP and Kip B. Shuman, Rusty E. Glenn and Brett D. Stecker of Shuman Glenn & Stecker.
The Yelp Investor Class Action Lawsuit is Nicholas R. Ingrao v. Jeremy Stoppelman et al., Case No. 3:20-cv-02753, in the U.S. District Court for the Northern District of California.
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11 thoughts onYelp Execs to Pay $18M to Settle Class Action Lawsuit Over Alleged Lies To Investors
Informed shows check coming today to CA
YELP has misled and allowed negative review to be posted to my profile, I contacted YELP and informed them it was false they refuse to remove the review.
add me, they have misled and allowed negative review to be posted to my profile, I contacted YELP and informed them it was false they refuse to remove the review.
YELP salesman lied to me when selling me a campaign on YELP. Next thing I knew, the billed my Debit card for 405.08.
The salesman said the conversation was recorded, but YELP wont let me listen to it in order to prove my point.
I put in their dispute form but they turned me down.
They have taken over $1,200 out of my bank account! I never authorized any of this. They will not do anything. They need a class action suit for doing this to agents, the complaints are numerous online. Their sales people are scammers.
How is Yelp still in business!! We had a disgruntled employee and they had their flunkies leave horrible reviews on Yelp, & google, Google deleted them immediately but Yelp refused to delete them and told me (in not so many words ) that if I advertised , I would have better control over my bad reviews.
We have tried many times to deal with yelp owning a small business. We can’t comment publicly and many people block comments. Any false reviews are not removed even though we prove they are false and we have zero recourse. At least Google takes down inappropriate comments and let’s companies respond publicly.
I joined an apparent anti yelp group on FB to look for support as I was bullied by Yelp to continue to advertise with them, have only bad reviews on my page when I refused, got locked out of my account for updating information, and finally had persons posing as prospective clients calIing and seek my personal information which got posted on my business page. In that FB group, scare tactics were adopted against persons who wanted to do something about this social menace. Cases showing YELP wins lawsuits were posted to deter others from filing lawsuits and the pulse was to ask all members there to ignore yelp and not bother. So you got bullies not only harassing you in the business community, but when you seek recourse and support in groups, you either have Yelp employees, management, their spies or someone trying scare tactics to deter you from taking any action. This has been my personal experience.
Yelp took almost $1000 from bank account misleading sale tactics and not bringing paid customers to my Food truck but took money out
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