Lyft Shareholders Win Class Status In Lawsuit Over IPO Disclosures
A federal judge in California has said investors in Lyft Inc’s initial public offering (IPO) can proceed as a class on claims that the ride-hailing company failed to disclose safety issues including alleged sexual assaults by Lyft drivers.
On Friday, US District Judge Haywood Gilliam Jr certified a class of investors who purchased shares in Lyft’s IPO. The judge rejected the company’s argument that individual inquiries were required to demonstrate whether investors were aware of the issues before buying in.
Investor Rick Keiner’s lawsuit criticises Lyft, its officers, and directors for failing to disclose what he calls a “pervasive” problem of sexual assaults by drivers as well as brake issues with its bike-share fleet. Keiner argues that Lyft omitted the information as it attempted to position itself as a more socially responsible company than rival Uber. In an attempt to convince the judge to reject class status, Lyft highlighted its interviews with some investors who said they had been aware of the company’s issues before buying in.
However, the judge said the interviews only demonstrated a general awareness of the issues and did not defeat the plaintiff’s claims.
