According to the law firm press release, the complaint alleges that Rocket Fuel failed to inform investors that defendants' Class Period misrepresentations concerning the Company's then financial and business condition, including its forecasted financial and business condition as alleged herein, were each materially false and misleading when made because defendants knew, or were reckless in not knowing, that: (i) a large percentage of the ads Rocket Fuel brokered were being "viewed" by automated fraudulent computer programs, rather than real people, such that the Company's operations and financial performance were in jeopardy; (ii) throughout the Class Period, Rocket Fuel's revenue growth was negatively impacted due to its inability to identify and eliminate bot traffic for its customers; (iii) no later than the beginning of February 2014, the Company knew that it would miss Wall Street consensus estimates for the quarter due to, among other things, customer concern about inventory quality; and (iv) the Secondary Offering was designed to enable Company insiders to unload their shares at artificially inflated prices.
On August 5, 2014, after the close of trading, Rocket Fuel announced that it expected 2014 revenue of $403 million to $427 million, down sharply from its forecast of $420 million to $435 million. The same day, the Wall Street Journal reported that "Rocket Fuel Inc. lowered its full-year revenue guidance for the year, pointing to customer concerns about inventory quality . . . ." During a same-day conference call with investors, Defendant suggested that concerns about fraudulent traffic is "a phenomena in our industry that hasn't been well understood," and tried to claim that the Company was "surprised by the strength of trends impacting our bookings in June , and we now feel our full-year guidance should take into account slightly lower sales productivity based on the following three factors." One of those trends was "bot traffic and low-quality ad space on digital exchanges." The following day, on August 6, 2014, the Company's shares fell from $24.75 to $17.05 – a decline of approximately 30%.
On December 15, 2014, the Court issued an Order appointing lead plaintiffs and approving lead counsel. Lead Plaintiffs filed a consolidated complaint on February 27, 2015.
On April 25, 2017, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved on June 5.