Thursday, June 27, 2013
Green Dot vindicated by court dismissal
General purpose reloadable prepaid card pioneer Green Dot Corp. reported that a class-action lawsuit against the company was thrown out of court on June 19, 2013. Two lawsuits were originally filed by the Law Offices of Howard G. Smithlaw and Glancy, Binkow & Goldberg LLP on behalf of Green Dot investors in the wake of the financial reforecast Green Dot made in July 2012 that resulted in a 60 percent drop in Green Dot stock.
The two suits were combined into one securities class action claiming Green Dot violated federal securities laws by offering false and misleading earnings forecasts prior to the July 26 reforecast. In the reforecast, the Pasadena, Calif.-based company disclosed threats to its business model that would likely result in lower revenues than previously stated.
But the United States District Court for the Central District of California dismissed the case "with prejudice," Green Dot said. The company noted that the court had granted a motion to dismiss in May 2103, and the plaintiffs subsequently agreed to voluntarily dismiss the case with prejudice rather than amend their complaint. No payments were made to the plaintiffs in connection with the dismissal, Green Dot added.
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