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New York, New York–(Newsfile Corp. – January 25, 2025) – Faruqi & Faruqi, LLP, a leading national security law firm, is investigating potential claims against Block, Inc. (“Block” or “Company”). (NYSE: SQ) and reminds investors of March 18, 2025 deadline seeking the role of lead plaintiff in a federal class action against the Company.
Faruqi & Faruqi is a leading national security law firm with offices in New York, Pennsylvania, California and Georgia. The firm has raised hundreds of millions of dollars for investors since its founding in 1995. See www.faruqilaw.com.
As described below, the complaint alleges that the Company and its directors violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (i) Block had in an extensive and lengthy compliance process that took years for Square and. Cash App, including by failing to take appropriate precautions regarding the identity of its customers or the nature of customer transactions to prevent the platform from being used for illegal or illegal activities; (ii) Block has created a safe haven for illegal and illegal activities prevalent on its Square platform and Cash App by placing limited obligations on customers who want to open accounts, make transactions, and deposit or withdraw money; promoting the use of bitcoin; and pressurizing Block’s banking partners to sacrifice the normal activities of your customers; (iii) thousands of transactions on Square and the Cash App are made in connection with a wide variety of illegal and illegal activities, including, among others, money laundering, child sexual abuse, trafficking of sex, drug trafficking, terrorist financing, contract killings, and illegal payments to organizations and individuals subject to economic sanctions; (iv) Block allowed its customers to withdraw funds even after accounts were identified for potentially illegal or illegal activities; (v) Blocking customers may open multiple accounts using false identities in order to engage in illegal or illegal activities; (vi) Block’s senior leadership and Board of Directors failed to correct demonstrated compliance deficiencies despite numerous red flags, internal employee reports of deficiencies and customer complaints; (vii) Block’s Cash App user metrics were artificially inflated through the use of fake accounts and the ability of criminals and other bad actors to open multiple accounts; and (viii) as a result of the above, Block was subject to an apparent, unstated risk of its conduct being exposed, thereby exposing Block to reputational risk, adverse regulatory actions, loss business activities, and adverse effects on the performance of the Block and. financial results.
On March 23, 2023, Hindenburg Research published a negative report on the Block titled: “Block: How Inflated User Profits and ‘Frictionless’ Theft Made It Easy for Insiders to Over $1 Billion.” On this news, the price of Block Class A common stock fell about 15%.
Then, on August 3, 2023, Block revealed that the US Securities and Exchange Commission and the United States Department of Justice were investigating allegations against Block and its employees that appeared in the Hindenburg Research report. On this news, the price of Block Class A common stock fell about 14%.
After that, on January 16, 2024, NBC News reported that federal authorities are investigating claims by two investors that Cash App did insufficient due diligence on its users — including “‘no operation’ active in creating information”” – opening the door to money laundering, terrorist financing, and other illegal activities. In these matters, the price of Block Class A stock is common it fell more than 5%.
Finally, on May 1, 2024, NBC News reported that federal prosecutors were investigating Block over allegations by a former employee that Block committed widespread and years-long wrongdoing at its facilities. two big ones, Square and Cash App. The employee reportedly provided prosecutors with internal Block documents that show Block failed to do due diligence on its customers, that Square processed thousands of transactions involving countries under economic sanctions (in including Cuba, Iran, Russia and Venezuela), and that Block has handled many cryptocurrency transactions for terrorist groups. On this news, the price of Block Class A common stock fell more than 8%.
The lead plaintiff appointed by the court is the investor with the greatest financial interest in the relief sought by a reasonable and common class of class members conducting and overseeing the case on behalf of the putative class. Any member of the arbitration panel may have the Court act as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent panel member. Your ability to participate in any recovery is not affected by the decision to serve as the lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information about Block’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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To view the source version of this release, please visit https://www.newsfilecorp.com/release/238339
