PayPal has consistently been one of the largest providers of electronic transfers in the world; however, a class action lawsuit has recently been filed against the payment processing giant by Gainey McKenna & Egleston.
The lawsuit, filed in the Northern District of California on behalf of those who acquired PayPal shares on the stock market (PYPL on the NASDAQ exchange), alleges that the company made misleading or false statements when they failed to disclose several important pieces of information, including:
- PayPal failed to disclose deficient controls and procedures
- PayPal did not use interchange rates for debit cards that were compliant with current laws and regulations
- The company did not disclose that a significant portion of its revenues was related to its improper conduct, making its earnings unsustainable
- As a result of such action, PayPal would be subject to increased regulatory investigation and enforcement
- PayPal made materially false statements as a result of these practices
When PayPal filed a quarterly report with the United States Securities and Exchange Commission (SEC) in July 2021, the company disclosed that it was facing investigations being led by the SEC and CFPB. The investigation is directly related to the use of PayPal Credit in connection with merchants that provide educational services. PayPal could be facing subpoenas related to the investigation as well.
This, understandably, has consumers worried, and the stock price of PayPal fell significantly. Investors who purchased shares during the period in question above should contact the law firm of Gainey McKenna & Egleston prior to the deadline of October 19, 2021. There is a lead plaintiff that is representing the rights of other plaintiff members during the litigation process.
The biggest issue at stake in the class action lawsuit is that many people who purchased shares of PayPal during the period in question were trading stock on the false belief that the company’s revenue was coming from legitimate business practices, which has been thrown into question. Many people may not have purchased stock in PayPal if they were aware of the unethical practices taking place. Everyone deserves to have their rights defended, which is why Gainey McKenna & Egleston have filed a lawsuit against PayPal.