Match Group will have to face a new securities fraud class action lawsuit relating to alleged fake accounts, after a federal judge in Texas refused to dismiss the amended complaint.
The online dating company is accused of misrepresenting financial information by failing to disclose the full extent of fraudulent accounts across its platforms. These are run by scammers and bots that look to extract money from Match Group’s legitimate users.
Plaintiffs allege that over 15% of the revenue stream came from fake profiles and that the company didn’t do enough remove these accounts while also allowing known sex offenders to be active.
The suit was originally dismissed in March after the judge ruled that not enough evidence was provided to support these allegations.
However, an amended complaint was quickly resubmitted and, despite Match Group’s efforts, the judge has determined that the plaintiffs have now adequately addressed potentially misleading statements or omissions.
The date for the trial has been set in October 2022 and both parties have been instructed to complete mediation.
Match Group’s lawsuit against the Tinder founders went to trial at the beginning of November, with the latter claiming that they missed out on billions of dollars when cashing in their stock options.
CFO and COO Gary Swidler mentioned in the recent third quarter financial results that he’s hoping that legal costs will be much lower next year than in 2021.
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