Overview
On October 22, 2021, the Honorable Alvin K. Hellerstein of the United States District Court for the Southern District of New York granted final approval of a $27.5 million settlement in this securities class action against financial technology start up GreenSky Inc., its directors and officers, as well as its underwriters, including Goldman Sachs, J.P. Morgan, Morgan Stanley, Citigroup Global Markets, Credit Suisse Securities. Plaintiffs allege that defendants made false and misleading statements in GreenSky’s Initial Public Offering (IPO) documents, in violation of the Securities Act of 1933.
On March 29, 2019, Judge Hellerstein appointed Cohen Milstein Co-Lead Counsel with Scott & Scott. The Fund Group was appointed Lead Plaintiff. On June 1, 2020, the court certified the class of investors.
Case Background
Defendant GreenSky, Inc. (NASDAQ: GSKY) is a financial technology company, based in Atlanta, Georgia, and incorporated in Delaware. GreenSky operates an online platform that enables creditors to process loan applications at the point of sale. More than 10,000 businesses are active users of GreenSky’s platform.
GreenSky filed a registration statement on April 27, 2018 and a prospectus on May 25, 2018 (together, the “Offering Documents”) in connection with its impending IPO. GreenSky’s IPO closed on May 29, 2018. The Company sold 43.7 million shares of Class A common stock at $23.00 per share in its IPO, for gross proceeds of over $1 billion.
Plaintiffs had alleged that GreenSky’s Offering Documents were false and misleading as they failed to disclose the substantial change in the composition of GreenSky’s merchant business mix and the resulting diminution in transaction-fee revenue, accounting for 87% of its overall revenue, as it moved from solar panel energy merchant sector to the healthcare sector.
On November 6, 2018, GreenSky’s stock price plummeted to $9.28 per share, sharply down from the IPO price of $23.00 per share and post-offering high of $26.77 per share.