Shareholders Seek Preliminary Approval of $73M Settlement in Nielsen Holdings Securities Fraud Class Action

In a lawsuit concerning allegations that data analytics company Nielsen made materially false and misleading statements and/or failed to disclose adverse information regarding certain business sectors and its operations, the parties have reached an arm’s-length agreement to resolve all the claims in the case, according to a motion for preliminary approval filed by the Nielsen shareholders earlier this week.

The lawsuit dates to 2018, when putative class actions were filed in California and Illinois and later transferred to and consolidated in the Southern District of New York. In particular, the plaintiffs took issue with representations made about Nielsen’s “Buy” business in 2016, including the alleged failure to disclose a trend of declining spend by certain customers, the value of the Buy segment’s goodwill in 2017 and 2018, and the company’s preparedness for the European Union’s General Data Protection Regulation. Those alleged misrepresentations caused the company’s share price to tumble, the lawsuit says, and prompted the plaintiffs to seek reparation on behalf of a class of aggrieved shareholders.

Previously, Judge Jesse M. Furman partly granted Nielsen’s motion to dismiss, after which the plaintiffs moved for class certification. Nielsen opposed, arguing that the plaintiffs failed to meet various Federal Rule of Civil Procedure class certification requirements. The court denied the motion as moot in an in-line this week after the plaintiffs moved for preliminary approval of the settlement.

The approval request rests on the grounds that the settlement will confer a “substantial benefit” to the settlement class, especially in view of the risks of further litigation. Among other contentions, the papers argue that the plaintiffs and their counsel have adequately represented the settlement class, citing extensive discovery, including the review of nearly 1 million pages of Nielsen’s documents and 21 depositions of fact and expert witnesses.

Other aspects of the proposed settlement satisfy Second Circuit requirements, the motion says. It specifies that the settlement will be well-noticed and distributed and that the attorneys’ fee award sought, up to 25%, is reasonable.

The plaintiffs are represented by lead counsel Labaton Sucharow LLP as well as Robbins Geller Rudman & Dowd LLP. Nielsen is represented by Simpson Thacher & Bartlett LLP.