A securities class action has been filed in the USDC, N.D.CA against Okta, Inc. (OKTA) on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Okta securities between March 5, 2021 through March 22, 2022.
On March 22, 2022, Okta confirmed that in January 2022 the Company had experienced a data breach caused by a hacking group known as Lapsus$, which potentially affected as many as 366 Okta customers. Separately, Okta was downgraded by Raymond James from “strong buy” to “market perform,” citing a “continually disconnected CIAM go-to-market strategy (i.e. still separate reps for Auth0/Okta, no communication to incent channel cross-sell, no evidence of improved technology/integration […]) While partners were willing to trust Okta’s track record, the handling of its latest security incident adds to our mounting concerns.”
On this news, Okta’s stock price fell $17.88 per share, or 10.74%, to close at $148.55 per share on March 23, 2022.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that:
- the Company had inadequate cybersecurity controls;
- as a result, the Company’s systems were vulnerable to data breaches;
- the Company ultimately did experience a data breach caused by a hacking group, which potentially affected hundreds of the Company customers;
- the Company initially did not disclose and subsequently downplayed the severity of the data breach;
- all the foregoing, once revealed, was likely to have a material negative impact on the Company’s business, financial condition, and reputation; and
- as a result, the Company’s public statements were materially false and misleading at all relevant times.
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