Green Dot Corporation Class Action Lawsuit
- Company Name
- Green Dot Corporation
- Stock Symbol
- Class Period
- May 9, 2018 to November 7, 2019
- Central District of California
On December 18, 2019, the Green Dot Corporation class action lawsuit was filed charging Green Dot and certain of its officers with violations of the Securities Exchange Act of 1934. The Green Dot class action lawsuit was commenced in the Central District of California on behalf of purchasers of Green Dot securities between May 9, 2018 and November 7, 2019 (the “Class Period”) and is captioned Koffsmon v. Green Dot Corporation, et al., No. 19-cv-10701.
Green Dot is a financial technology and bank holding company that operates a platform, referred to as “Banking as a Service” or “BaaS,” that provides banking and financial services to consumers under brand names such as Green Dot, GoBank, and RapidPay.
The Green Dot class action lawsuit alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Green Dot’s business and prospects. Specifically, defendants failed to disclose that Green Dot’s strategy to attract “high-value” long-term customers was at the expense of “one and done” customers, which represented a significant source of revenues in its legacy segment and, consequently, Green Dot’s strategy was self-sabotaging. As a result of this information being withheld from the market, Green Dot securities traded at artificially inflated prices during the Class Period, with Green Dot’s stock price reaching a high of more than $90 per share.
Then on November 7, 2019, after the market closed, Green Dot announced its financial results for the third quarter of 2019. On an earnings call to discuss the results the same day, Green Dot’s CEO revealed that the continuing year-over-year decline in accounts in its active consumer business approximated 620,000 and most were “one-time use account.” Green Dot’s CFO added that while they were reiterating Green Dot’s full-year guidance, they expected Green Dot’s financial results to be at the lower end of the guidance. On this news, the price of Green Dot stock fell 18% to close at $24.54 per share on November 7, 2019.
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