- Company Name
- Care.com, Inc.
- Stock Symbol
- Class Period
- March 27, 2015 to April 1, 2019
- Motion Deadline
- June 2, 2019
- District of Massachusetts
The complaint charges Care.com and certain of its officers with violations of the Securities Exchange Act of 1934. Care.com provides an online family care platform to “help families make informed decisions” regarding caregivers.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Care.com’s business and operations, including that Care.com did not effectively screen member information against various databases and other sources for criminal or other inappropriate behavior and that hundreds of the day-care centers listed on the Company’s website as being state licensed were in fact unverified. As a result of this information being concealed during the Class Period, the price of Care.com common stock was artificially inflated to more than $25 per share.
On March 8, 2019, the truth about Care.com’s ineffective screening practices began to emerge when The Wall Street Journal published an article titled “Care.com Puts Onus on Families to Check Caregivers’ Backgrounds – With Sometimes Tragic Outcomes.” The article described how caregivers in the United States “who had police records were listed on Care.com and later were accused of committing crimes while caring for customers’ children or elderly relatives.” These alleged crimes included theft, child abuse, sexual assault and murder. On this news, the price of Care.com stock fell 13% to close at $20.48 per share on March 11, 2019.
Then on March 31, 2019, The Wall Street Journal reported that “hundreds of day-care centers” listed as “state licensed” on the Care.com website did not appear to be, and that tens of thousands of unverified day-care center listings were scrubbed from the Care.com website just before the March 8, 2019 Wall Street Journal article was published. Following this disclosure, the price of Care.com stock fell nearly 7% to close at $18.45 per share on April 1, 2019.