'Bot Farms'? Securities Suit Centers on PayPal New Account Incentives
This suit was surfaced by Law.com Radar. Read the document here.
April 05, 2023 at 03:06 PM
1 minute read
Securities LitigationPayPal Holdings was named as a nominal defendant in a stockholder derivative lawsuit Tuesday in New Jersey District Court in connection with its 'net new active accounts,' a key 2021 internal operational metric. The court action, brought by Herman Jones LLP on behalf of Stephen Nelson, accuses the company's officers and directors of failing to disclose that many of the new customers that received cash incentives to open new accounts were actually bot farms that created and profited from millions of fraudulent PayPal accounts. According to the suit, the 4.5 million fraudulent accounts caused the company's stock prices to fall by 25 percent, erasing roughly $50 billion in market value. Counsel have not yet appeared for the defendants. The case is 3:23-cv-01913, Nelson v. Schulman et al.
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