The firm is looking to accuse Match of failing to inform investors about potentially illegal practices relating to fake profiles.
The practices concerned are those highlighted in the Federal Trade Commission’s own litigation against the dating giant. The regulator claims that Match dealt with fake profiles differently for paid and free user accounts on its site.
Free users would see message requests hidden behind a paywall, many of which came from fake accounts. These message requests persuaded some users to buy expensive subscriptions, the FTC claims.
Allegedly, paid users would have stronger protections against contact from these scam accounts. Match would not have benefitted in the same way from having its paid users subject to fraudulent messages.
The law firm’s statement reads: “As a result [of the above malpractice], the lawsuit alleges that the Company was reasonably likely to be subject to regulatory scrutiny and that the Company lacked adequate disclosure controls and procedures. As a result, the lawsuit alleges that Match Group’s positive statements about the Company’s business, operations, and prospects, were materially misleading or lacked a reasonable basis.
“When this information was finally disclosed to investors on September 25, 2019, the Company’s share price fell $1.39 per share on unusually high trading volume.”
The new case also claims, in parallel with the FTC, that Match.com made it “difficult and confusing” for consumers to end their subscriptions.
Read more here.