On April 27, 2018, investors sued QuinStreet, Incorporated (“QuinStreet” or the “Company”) in United States District Court, Northern District of California. Plaintiffs in the federal securities class action allege that they acquired QuinStreet stock at artificially inflated prices between February 10, 2016 and April 10, 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. Here’s everything you need to know about the QuinStreet class action lawsuit (QNST class action lawsuit):

Summary of the Allegations

Company Background

The Company (NASDAQ: QNST) says it specializes in “performance marketing products and technologies.”

QuinStreet has nearly two decades of experience in digital performance marketing, and says media its management technology platform (the QuinStreet Media Platform, or QMP) “allows clients to access high-intent digital traffic from any visitor device precisely, cost effectively and at scale.”

The Company does most of its business and generates most of its revenue in North America, but says it also has “growing businesses” in Brazil and India. It claims its clients include “some of the world’s largest companies and brands” in “financial services, IT / technology, home services and education.”

Summary of Facts

The Company and two of its senior officers now stand accused of deceiving investors by lying and withholding critical information about QuinStreet’s business practices during the Class Period.

Specifically, they are accused of omitting truthful information about its position on “click-through” fraud and the quality of its websites from SEC filings and related material. By deliberately or recklessly doing so, the defendants allegedly caused QuinStreet stock to trade at artificially inflated prices during the time in question.

The truth came out in a report published by Kerrisdale Capital as the market opened on April 11, 2018. In it, Kerrisdale discussed the Company’s alleged participation and awareness in “generating fake web traffic and poor quality clicks for its customers.”

A closer look…

As alleged in the April 27 complaint, the Company repeatedly made misleading public statements throughout the Class Period.

For example, on a form filed with the SEC when the Class Period began, the Company said the following regarding the risk factor associated with fraudulent clicks: “We could lose clients if we fail to detect click-through or other fraud on advertisements in a manner that is acceptable to our clients.”

On another form filed with the SEC on August 19, 2016, QuinStreet said the following regarding its goal of generating high-quality results for its clients: “Our strategy for pursuing this opportunity includes the following key components: build, buy and partner with vertical content websites that provide the most relevant and highest quality visitor experiences in the client and media verticals we serve…”

Finally, on yet another form filed with the SEC on September 8, 2017, QuinStreet again discussed its methods for delivering optimal results to its clients saying in pertinent part: “… focus on generating sustainable revenues by providing measurable value for our clients; build QuinStreet and our industry sustainably by behaving ethically in all we do and by providing quality content and website experiences to Internet visitors…”

Impact of the Alleged Fraud on QuinStreet’s Stock Price and Market Capitalization

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 June 26, 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 QuinStreet 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:

About Us

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.

For additional information about this case or our institutional services, please contact us.