Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Block, Inc. (XYZ)

NEW YORK, Feb. 06, 2025 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of all persons or entities who purchased or otherwise acquired Block, Inc. (“Block” or the “Company”) (NYSE: XYZ) securities between February 26, 2020 and April 30, 2024, inclusive (the “Class Period”).

The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company lacked adequate customer due diligence practices and failed to adequately monitor the nature of the transactions that were being processed on the Company’s platforms; (ii) Company management imposed minimal obligations on users seeking to open accounts or transact on the Company’s platforms and encouraged the use of bitcoin which, together, allowed the Company to become a haven for unlawful activities; (iii) Company management ignored red flags indicating that Square and Cash App were being widely used for a variety of unlawful and unethical activities, including, inter alia, money laundering, child sexual abuse, sex trafficking, drug trafficking, terrorism financing, contract killings, and transactions in violation of economic sanctions; (iv) as a result of the foregoing, the Company was at heightened risk of regulatory scrutiny and reputational damage, and positive statements concerning the Company’s business, operations, and prospects were materially misleading and lacked a reasonable basis at all relevant times.

According to the Complaint, on March 23, 2023, Hindenburg Research published a report (the “Hindenburg Report”), alleging that Block’s explosive growth was driven by “the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics.” The Complaint alleges that The Hindenburg Report revealed that Cash App was widely used for, inter alia, sex trafficking, drug trafficking, consumer scams, COVID-19 relief fraud, and even contract killing payments, explaining that “Cash App’s embrace of non-compliance begins by making it easy for users to get on the platform, easy for them to get back on the platform if their accounts are closed, and easy to remain anonymous or operate under blatantly false identities.” The Complaint further alleges that The Hindenburg Report further detailed interviews with former Block employees who explained that the Company systematically suppressed internal and user complaints related to rampant fraudulent and criminal activity on the Company’s platforms.

The Complaint further alleges that on this news, the price of Block stock declined 15% in one day, from a close of $72.65 per share on March 22, 2023 to a close of $61.88 per share on March 23, 2023. The Complaint also alleges that on August 3, 2023, the Company disclosed that the SEC and the U.S. Department of Justice (“DOJ”) were investigating the allegations contained in the Hindenburg Report. The Complaint alleges that on this news, the price of Block stock declined nearly 14% in one day, from a close of $73.55 per share on August 3, 2023, to a close of $63.52 per share on August 4, 2023.

Investors who purchased or otherwise acquired shares of Block should contact the Firm prior to the March 18, 2025 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at [email protected] or [email protected].

Please visit our website at http://www.gme-law.com for more information about the firm.

Wall St Business News, Latest and Up-to-date Business Stories from Newsmakers of Tomorrow