SAN FRANCISCO, Feb. 3, 2025 — Cardlytics, an advertising technology firm known for linking marketers to consumers through bank applications, is currently embroiled in a class-action lawsuit. The lawsuit accuses the company of providing misleading information about its potential for growth, thereby allegedly deceiving investors.
The legal action, initiated by Hagens Berman, a global litigation firm, invites investors who have incurred significant losses during the specified class period from March 14, 2024, to August 7, 2024, to come forward. The law firm is also calling for individuals with insider knowledge that could aid the investigation to contact its attorneys.
Filed in the Northern District of Georgia, the lawsuit centers around claims that Cardlytics and some of its top current and past executives violated the Securities Exchange Act of 1934. According to the litigation detailed in “Froess v. Cardlytics, Inc.,” the company allegedly failed to fully disclose crucial business details and made “false and/or misleading statements” regarding its financial health and operations.
One core allegation in the lawsuit is that Cardlytics misrepresented how increased consumer engagement would contribute to financial growth. Despite an uptick in consumer incentives which surged by 20.2 percent, the company purportedly struggled to convert increased user interaction into equivalent growth in billings, which only saw a 12 percent increase, as stated in the first-quarter results of 2024.
For investors, the impact of these revelations was substantial. Following the announcement of the first-quarter results on May 8, 2024, Cardlytics’ stock plummeted more than 36 percent. The company’s financial woes continued into the second quarter of 2024, with a reported 9 percent drop in revenue year-over-year and a 3 percent slide in adjusted contributions. These figures were accompanied by the resignation of CEO Karim Temsamani, which further led to a dramatic 57 percent fall in stock prices.
Beyond financial figures, the lawsuit also scrutinizes adjustments to Cardlytics’ Ads Decision Engine. The claim suggests that although these changes were meant to enhance consumer engagement, they instead resulted in budget under-deliveries and discrepancies in customer billing forecasts. These allegations cast a shadow over the reliability of the company’s growth strategies and technological updates.
The legal scrutiny of Cardlytics’ operations and disclosures follows a broader investigation into whether the company might have intentionally misled investors about the viability of its growth initiatives. Reed Kathrein, a partner at Hagens Berman, is leading the ongoing investigation.
In a bid to secure the involvement of more stakeholders, the firm highlights an opportunity for whistleblowers who possess non-public information about Cardlytics. Under the SEC Whistleblower program, such individuals might be eligible for rewards totaling up to 30 percent of any successful recovery made by the SEC.
For those seeking more information or considering legal action, resources and details are available on Hagens Berman’s website. The firm specializes in championing plaintiffs’ rights across various corporate accountability cases, boasting over $2.9 billion in recoveries from such litigations.
Hagens Berman urges anyone affected by the issues surrounding Cardlytics to reach out and potentially assist in the ongoing class-action suit. For more details, affected parties and potential whistleblowers can contact Reed Kathrein directly.
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