According to the law firm press release, the Complaint charges Green Dot and certain of the Company’s executive officers with violations of federal securities laws. Green Dot provides widely distributed, low cost banking and payment solutions to a broad base of domestic consumers. Green Dot's products and services include General Purpose Reloadable (“GPR”) prepaid cards.
The Complaint alleges that throughout the Class Period the defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about Green Dot’s business, operations and prospects. Specifically, the Complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company’s new internal risk policies and procedures were negatively impacting Green Dot’s growth in new account activations; (2) that certain of Green Dot’s retailers were planning to start selling competitive GPR products in addition to the Company’s products; (3) that the Company lacked historical data to accurately predict how other retailers’ sales of competitive GPR products would impact Green Dot’s sales; and (4) that, as a result of the foregoing, the defendants’ positive statements about Green Dot’s business, operations and prospects, as well as those regarding Green Dot’s revenue outlook for the 2012 fiscal year, lacked a reasonable basis.
On July 26, 2012, after the market closed, Green Dot disclosed that it was updating its previously issued outlook for the remainder of the year to reflect the impact of new competition and new internal risk policies and controls. Specifically, the Company announced that the revised outlook reflects “the impact of new internal risk policies and controls to improve the security and quality of [Green Dot’s] portfolio,” and that the “reforecast also assumes that by later this year, many of [the Company’s] retailers will start to sell competitive GPR products in addition to [Green Dot’s] products.” Moreover, the Company admitted that “[b]ecause we lack the historical data to accurately predict how [the new competition] will impact [Green Dot’s] sales, we have taken what we believe to be a conservative view of any potential impact.”
As a result of this news, the Company's shares declined $14.26 per share, or 61.15%, to close on July 27, 2012 at $9.06 per share, on unusually heavy volume.
On October 25, 2012, the Court issued an order of consolidation along with appointing lead plaintiff and lead counsel. On December 21, 2012, Consolidated Complaint was filed by the lead plaintiffs against the defendants.
On June 17, 2013, the Court stipulated that the class action be dismissed, with prejudice and without costs or attorneys’ fees under any federal or state law.
On June 19, 2013, the Court issued an order dismissing the case with prejudice and without costs or attorneys' fees under any federal or state law.