A securities class action lawsuit has been filed in the USDC, S.D.N.Y. against Riskified Ltd. (“Riskified” or the “Company”), and certain other defendants, alleging violations of federal securities laws. Riskified (NYSE: RSKD) is an eCommerce risk management platform that uses machine learning to identify fraud. If you purchased Riskified shares in, or traceable to the Company’s July 28, 2021 initial public offering (“IPO”), and would like to join the action, you are encouraged to click on “Submit Your Information” before July 1, 2022.
On July 1, 2021, Riskified filed with the U.S. Securities and Exchange Commission a Registration Statement on Form F-1 for the IPO, which, after several amendments, was declared effective on July 28, 2021. The Registration Statement was used to sell to the investing public 20.125 million Riskified Class A ordinary shares at $21 per share, generating over $422 million in gross proceeds.
The complaint alleges that the Company’s IPO’s Registration Statement, made inaccurate statements of material fact because it failed to disclose adverse facts that existed at the time of the IPO, including that:
- as Riskified expanded its user base, the quality of Riskified’s machine learning platform deteriorated (rather than improved as represented in the Registration Statement);
- Riskified had expanded its customer base into industries with relatively high rates of fraud – including partnerships with cryptocurrency and remittance business – in which Riskified had limited experience and that this expansion negatively impacted the effectiveness of Riskified’s machine learning platform; and
- as a result, Riskified was suffering from materially higher chargebacks and cost of revenue and depressed gross profits and gross profit margins during its third fiscal quarter of 2021. As a result, according to the complaint, the Registration Statement’s representations regarding Riskified’s historical financial and operational metrics and purported market opportunities did not accurately reflect the actual business, operations, and financial results and trajectory of Riskified prior to and at the time of the IPO.
As this information began to reach the market, the Company’s stock declined. At the time of the filing of the complaint, Riskified’s shares traded below $6 per share, or more than 70% below the IPO price.
If you suffered a loss on your investments or would like to inquire about joining an action to recover your loss under the federal securities laws, please complete the form below.
An attorney will contact you at no cost to provide you information about joining the action and answer your questions. Please note that submission of this form does not by itself form an attorney-client relationship nor does filing out this form mean you have joined any lawsuit.