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GreenSky Wins Dismissal of Putative Class Action Securities Litigation

On April 22, 2020, the Commercial Division of the New York State Supreme Court dismissed a shareholder lawsuit against Cravath client GreenSky, Inc., a financial technology company, and certain officers and directors. The putative securities class action alleged that GreenSky’s offering documents, issued in connection with its initial public offering, contained false and misleading statements relating to its shift away from solar merchants and the resulting impact on transaction fee rates and revenue, in violation of the federal securities laws. The court ruled that GreenSky did not violate its duty to disclose because the Company disclosed its shift away from solar merchants to lower-fee merchants, and that the omission of more specific disclosures about the fees paid by solar merchants was not material, as reasonable investors would have inferred from the offering documents that the new merchants would pay lower fees.

The Cravath team was led by partners Karin A. DeMasi and Lauren Roberta Kennedy and included associates David H. Korn and Sophia M. Suarez.

The case is In re: GreenSky Inc Securities Litigation, New York State Supreme Court, New York County, No. 655626/2018.