The Match Group’s latest filing asserts that the Northern District of Texas court overseeing the shareholder suit correctly granted its motion to dismiss before, and should do so again. The brief, filed over the weekend on behalf of defendants Match Group Inc., which operates dating and matchmaking websites like Match.com and Tinder, its CEO Amanda Ginsberg, and CFO Gary Swidler, claims that the plaintiff’s “paltry additions” once again fall short of meeting the federal securities law’s pleading requirements.
The plaintiff first filed suit against the Match Group in 2019, and filed an amended complaint following dismissal without prejudice earlier this year. The operative complaint contends that scammer “bot” accounts on a number of Match Group websites whose operators “sought to extract money or things of value from Match’s legitimate customers,” accounted for 15-20% of one of the Match Group’s reported revenue streams.
Among other things, the complaint contends that the defendants failed to disclose the fraud and forecast its earnings accurately. In addition, it alleges that the defendants hid information about sex offender users on its sites.
In turn, the shareholder argues, the defendants made materially false and misleading statements that incorrectly “depicted Match as a strong company with solid website / app user base, high customer satisfaction, and effective safety screening.” The complaint points to the testimony of several confidential witnesses who were formerly employed by the Match Group as evidence.
In its reply brief, Match asserts that the allegations do not “demonstrate the falsity of any disclosure or establish that any individual Defendant personally knew of facts contradicting their statements, which must be pled with particularity to establish scienter.” The filing points to purported flaws in the complaint, including failure to identify details about the fake accounts.
Specifically, the Match Group alleges that the revised complaint does not include details such as “how long these purported ‘bad actor’ accounts stayed active, how much revenue (if any) was received from these accounts, what portion of this purported ‘15-20%’ figure actually comprised ‘fake’ or ‘scammer’ accounts, or what specific knowledge Ginsberg or Swidler had regarding specific amounts of revenue obtained from purportedly fake accounts.”
The plaintiff’s two new exhibits containing allegedly actionable statements “simply confirm Plaintiffs’ inability to plead a securities fraud claim,” the brief said. Instead of weighing in favor of the plaintiff’s fraud allegations, they indicate the Match Group’s desire to disclose information about fake and dangerous users to the investing public.
The plaintiff is represented by Pomerantz LLP, Glancy Prongay & Murray LLP, and Kendall Law Group PLLC. The Match Group and individual defendants are represented by Norton Rose Fulbright US LLP.