TrueCar develops and publishes an online automobile information and communication platform. The Company provides data and price reports for new and used cars, and provides a platform for car dealers to communicate with
consumers. TrueCar operates a company-branded platform that can be accessed directly, and also customizes and operates its platform on a co-branded basis for many affinity group marketing partners, including financial institutions, such as the United Services Automobile Association (“USAA”), membership-based organizations such as Consumer Reports, and employee buying programs for large enterprises such as IBM and WalMart. TrueCar’s platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar Certified Dealers. The platform also enables automobile manufacturers, or OEMs, to connect with TrueCar users during the purchase process to deliver targeted incentives to consumers.
According to the law firm press release, the Complaint alleges that during the Class Period the Company made numerous positive statements concerning the Company's prospects and growth, while failing to disclose negative developments related to the United Services Automobile Association ("USAA"), its largest source of revenue.
The Complaint further alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) that USAA had been planning significant changes to its website that would have a material adverse effect on the volume of purchases generated by USAA; (2) that USAA made significant changes to its website that would have a material adverse effect on the volume of purchases generated by USAA; (3) that the changes to USAA's website maintained by TrueCar caused a material adverse effect on the volume of purchases generated by USAA; and (4) that, as a result of the foregoing, Defendants' statements about TrueCar's business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis.
On June 27, 2018, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on August 24. On October 31, Lead Plaintiff voluntarily dismissed the Underwriter Defendants. Defendants filed a Motion to Dismiss the amended Complaint on November 5. On February 5, 2019, the Court issued an Order denying Defendants' Motion to Dismiss. On March 8, Lead Plaintiff filed a Motion for Class Certification. The Court issued an Order granting the Motion for Class Certification on May 9.
On July 3, 2019, the parties filed a notice announcing that they had reached an agreement in principle to settle the outstanding claims. The parties entered into a Stipulation and Agreement of Settlement on August 2. On October 15, the Court granted preliminary approval of the Settlement.