Court Denies Green Dot’s Bid to End Securities Fraud Suit

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May 6, 2024

Robbins Geller Rudman & Dowd LLP attorneys defeated a motion to dismiss a securities fraud class action case against Green Dot Corporation and its former top officers.

The Firm represents lead plaintiff New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund and plaintiff Teamsters Local Union No. 727 Pension Fund in this class action case, which is pending before the Honorable Dean D. Pregerson of the U.S. District Court for the Central District of California.

Green Dot allegedly failed to disclose that the company’s prepaid debit card business, which sells high-fee, prepaid debit cards, was faltering. Rather than come clean with investors, defendants made allegedly misleading statements to conceal the losses. Meanwhile, the former CEO and former CFO sold $62 million of their own Green Dot shares while the stock price was artificially inflated. The truth began to emerge in 2019, however, when Green Dot was forced to make a series of partial disclosures that revealed the slowdown in account growth, prepaid account losses, and the departure of both the CEO and CFO. Green Dot’s stock price suffered on the heels of these disclosures, dropping over 67% between February and November 2019.

In rejecting Green Dot’s motion to dismiss the case, the court noted the complaint’s allegations that, “while Green Dot’s stock plummeted in value to less than $25 per share as the truth about its business came to light, [former Green Dot executives] sold millions of dollars of Green Dot shares at average prices of $76.87 and $77.90 per share, respectively, before abruptly leaving the company.”

Robbins Geller attorneys Jason A. Forge, Rachel L. Jensen, Christopher R. Kinnon, and John M. Kelley represent lead plaintiff New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund and plaintiff Teamsters Local Union No. 727 Pension Fund.

About Robbins Geller

Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex litigation firms, representing plaintiffs in securities fraud, shareholder derivative, antitrust, corporate takeover, and consumer fraud and privacy cases. With 200 lawyers in 10 offices, Robbins Geller is one of the world’s largest plaintiffs’ firms, and the Firm’s attorneys have obtained many of the largest securities, antitrust, and consumer class action recoveries in history.

Over the last decade, our Firm has been ranked #1 on the ISS Securities Class Action Services law firm rankings for six out of the last ten years for securing the most monetary relief for investors. In the last four years, Robbins Geller recovered $6.6 billion for investors in securities-related class action cases – over $2.2 billion more than any other law firm during that time. The Firm secured the largest-ever securities fraud class action settlement – $7.2 billion – in In re Enron Corp. Securities Litigation.

For media inquiries, please contact media@rgrdlaw.com or call (619) 338-3821.

In re Green Dot Corp. Sec. Litig., No. 2:19-cv-10701 (C.D. Cal.).

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