By now, those who have not personally used a ridesharing app have probably at least heard of one, such as Uber or Lyft. While these ridesharing programs are certainly popular among many people in New York, they are not without controversy. Lyft is currently dealing with securities litigation for allegedly making misleading claims.
A lawsuit alleging securities fraud was recently filed against Lyft. The suit claims that Lyft made misleading and inaccurate claims regarding its business when it filed to go public. The company also allegedly failed to disclose safety and labor issues that it knew about. Information regarding safety issues regarding more than 1,000 recalled bicycles was also left out according to the shareholder lawsuit.
Stock prices went up based on the inaccurate information, but the suit says those prices were artificially inflated. Shortly after the company went public its stock prices fell by up to 3.6%. Prices recovered slightly later that same day. However, the inflated stock prices may have led some people to make purchases that, had they been privy to additional information, they might not have otherwise made.
Companies are expected to provide accurate and relevant information to not only shareholders, but also to the public in certain situations. When companies fail to disclose certain information or fail to provide relevant information, they can affect things like stock prices and more. Even if done inadvertently, these actions made lead to accusations of securities fraud. Facing securities litigation can be both time consuming as well as financially stressful, so businesses in New York are well advised to consult with an experienced attorney in as timely a manner as possible.