The Complaint brought forth claims for violations of the Securities Exchange Act of 1934 against Bankrate, Inc. (“Bankrate” or the “Company) and certain of its senior executives. The Complaint alleged that Defendants made false and/or misleading statements, concurrently failing to disclose material adverse facts regarding the Company’s publicly reported financial results throughout the Class Period.
Bankrate operates an online personal finance website, which aggregates and publishes personal finance content and generates revenue through advertisements on its websites and lead generation.
Specifically, the Complaint alleged that Defendants: (1) published financial statements that were not prepared or presented in accordance with generally accepted accounting principles, and (2) falsely certified that Bankrate’s internal controls were adequate to prevent the dissemination of false financial results. Lead Plaintiff alleged certain Defendants manipulated Bankrate’s public filings to reflect financial results in 2012 to artificially inflate key financial metrics in order to meet market expectations. Then on September 15, 2014, Bankrate disclosed that the SEC has requested documents related to its financial reporting during 2012, and that the Company’s Chief Financial Officer had resigned. The Company also announced that in connection with the SEC’s investigations, investors should no longer rely on its 2011, 2012, and 2013 financial statements. That day, the Company’s stock price fell as much as 22%. Less than a month later, on October 9, 2014, Bankrate filed a Form 8-K disclosing that the United States Department of Justice had also opened an investigation into the same financial reporting issues that the SEC was investigating. As a result, the price of Bankrate stock declined an additional 11.20%.
On January 16, 2015, the City of Los Angeles, acting through its Fire and Police Pension System was appointed Lead Counsel and Saxena White P.A. was appointed Liaison Counsel for the Class.
On December 8, 2015, Lead Plaintiff filed a Second Amended Complaint. Following Defendants’ motion to dismiss briefing, the parties began negotiations towards a settlement, and agreed to a settlement of $20,000,000. After the action had been actively litigated by the parties for two years, on July 18, 2016, the Parties filed a Stipulation and Agreement of Settlement. On August 26, 2016, the Court preliminarily approved the settlement, and then on February 6, 2017, entered final judgment finding the settlement to be fair, adequate and reasonable.