Wicks v. Alphabet, Inc., et al 3:18-cv-06245-JSW — On October 11, 2018, investors sued Alphabet, Inc., (Google, Alphabet, GOOG, or the Company) in United States District Court, Northern District of California. The GOOG class action alleges that plaintiffs acquired Alphabet stock at artificially inflated prices between April 23, 2018 and October 7, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information about the GOOG Lawsuit, contact us today!
Summary of the Allegations
According to its website, Alphabet (NASDAQ: GOOG) is “mostly a collection of companies.” Of all of its subsidiaries, Google, Inc. (“Google”) is the largest and best known.
Among other things, Alphabet operates a social networking platform through Google. This platform, called Google+, facilitates communications between users and their families, friends and co-workers. As on similar social media platforms, Google+ users can supposedly control access to personal information through privacy settings.
The Company’s alleged failure to disclose certain information related to Google+ user privacy and its ability to safeguard related material is at the crux of the October 11 complaint.
Summary of Facts
Alphabet, two of its senior officers and Google’s CEO (the “Individual Defendants”) now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about the failure of its security measures and consequences of said failure from SEC filings and related material. By recklessly or knowingly doing so, they allegedly caused Alphabet stock to trade at artificially inflated prices during the time in question.
The truth emerged in an October 8, 2018, article published by The Wall Street Journal. Using information provided by “people briefed on the incident” and “documents reviewed,” the Journal reported that, “in March 2018, Google discovered a software glitch in its Google+ social network that had exposed users’ personal data to third parties, but ‘opted not to disclose the issue… in part because of fears that doing so would draw regulatory scrutiny and cause reputational damage.’”
A closer look…
As alleged in the October 11 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.
For example, on a form filed with the SEC at the beginning of the Class Period, the Company discussed certain risk factors, saying in pertinent part: “Privacy concerns relating to our technology could damage our reputation and deter current and potential users or customers from using our products and services. If our security measures are breached resulting in the improper use and disclosure of user data, or if our services are subject to attacks that degrade or deny the ability of users to access our products and services, our products and services may be perceived as not being secure, users and customers may curtail or stop using our products and services, and we may incur significant legal and financial exposure.”
Then, on a form filed with the SEC on April 23, 2018, the Company said in pertinent part: “There have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2017.”
The Company reiterated its claim about the lack of material changes to its risk factors on a form filed with the SEC on July 23, 2018.
Impact of the Alleged Fraud on Alphabet’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price two trading days after disclosures:
|Two day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is December 10, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Alphabet common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.