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Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 1 of 17
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`
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`POMERANTZ LLP
`Jennifer Pafiti (SBN 282790)
`468 North Camden Drive
`Beverly Hills, CA 90210
`Telephone:
`(818) 532-6499
`E-mail: jpafiti@pomlaw.com
`
`Attorney for Plaintiff
`- additional counsel on signature page -
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`
`ADAM WICKS, Individually and On
`Behalf of All Others Similarly Situated,
`
`
`
`Case No.
`
`
`CLASS ACTION COMPLAINT
`FOR VIOLATION OF FEDERAL
`SECURITIES LAWS
`
`
`JURY TRIAL DEMANDED
`
`) ) ) ) ) ) ) ))
`
`Plaintiff,
`
`
`ALPHABET, INC., LAWRENCE E.
`PAGE, SUNDAR PICHAI and RUTH M.
`PORAT,
`
`
`Defendants.
`
`v.
`
`
`
`
`
`Plaintiff Adam Wicks (“Plaintiff”), individually and on behalf of all other persons
`
`similarly situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against
`
`Defendants (defined below), alleges the following based upon personal knowledge as to Plaintiff
`
`and Plaintiff’s own acts, and information and belief as to all other matters, based upon, inter alia,
`
`the investigation conducted by and through Plaintiff’s attorneys, which included, among other
`
`things, a review of the Defendants’ public documents, conference calls and announcements made
`
`by Defendants, United States Securities and Exchange Commission (“SEC”) filings, wire and
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`press releases published by and regarding Alphabet, Inc. (“Alphabet” or the “Company”),
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 2 of 17
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`analysts’ reports and advisories about the Company, and information readily obtainable on the
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`Internet. Plaintiff believes that substantial evidentiary support will exist for the allegations set
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`forth herein after a reasonable opportunity for discovery.
`
`NATURE OF THE ACTION
`
`This is a federal securities class action on behalf of a class consisting of all
`
`1.
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`persons other than Defendants who purchased or otherwise acquired common shares of Alphabet
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`between April 23, 2018 and October 7, 2018, both dates inclusive (the “Class Period”). Plaintiff
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`seeks to recover compensable damages caused by Defendants’ violations of the federal securities
`
`laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of
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`1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
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`2.
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`Alphabet was incorporated in 2015 and is the parent company of its leading
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`subsidiary Google Inc. (“Google”), among others. Google was founded in 1998. Alphabet and
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`Google are headquartered in Mountain View, California. The Company’s common stock trades
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`on the NASDAQ Global Select Market (“NASDAQ”) under the ticker symbol “GOOG.”
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`3.
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`Alphabet, through its subsidiary Google, operates a social networking website
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`called “Google+” that allows people to communicate with their family, friends, and coworkers.
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`Google+ users ostensibly have the ability to share and restrict the sharing of personal information
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`according to their preferences by changing privacy settings.
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`4.
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`Between 2015 and March 2018, a software glitch in the Google+ website
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`permitted outside developers to access the personal profile data of Google+ members who had
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`not opted to permit their data to be shared publicly. Defendants discovered this glitch in March
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`2018, ran tests to determine the impact of the glitch, and determined that the data of nearly half
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`of a million users had been exposed to third parties. Google’s legal and policy staff drafted a
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`memorandum regarding the security failure and shared it with senior executives. The
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 3 of 17
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`memorandum warned that disclosing the incident would likely trigger “immediate regulatory
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`interest.” Google’s CEO, Defendant Pichai, was briefed on the plan not to notify users after an
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`internal committee had reached that decision.
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`5.
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`Throughout the Class Period, Defendants repeatedly made materially false and
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`misleading statements regarding the security failure affecting users personal data. Specifically,
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`Defendants made false and/or misleading statements and/or failed to disclose that: (1) the
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`Company’s security measures had failed recently and massively, as Google had exposed the
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`private data of hundreds of thousands of users of Google+ to third parties; (2) damage to the
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`Company’s reputation and operating results and loss of customers from this failure of the
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`Company’s security measures were imminent and inevitable; (3) the Company’s security
`
`protections did not shield personal user data against theft and security breaches; and (4) the
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`Company’s security measures had been breached due to employee error, malfeasance, system
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`errors or vulnerabilities.
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`6.
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`On October 8, 2018, citing “people briefed on the incident and documents
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`reviewed,” The Wall Street Journal reported that in March 2018, Google discovered a software
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`glitch in its Google+ social network that had exposed users’ personal data to third parties, but
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`“opted not to disclose the issue . . . in part because of fears that doing so would draw regulatory
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`scrutiny and cause reputational damage.” Following this news, Google’s stock price fell $67.75
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`per share, or 5.9%, over the following two trading sessions, to close at $1,081.22 per share on
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`October 10, 2018.
`
`7.
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`As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in
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`the market value of the Company’s common shares, Plaintiff and other Class members have suffered
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`significant losses and damages.
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 4 of 17
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`JURISDICTION AND VENUE
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`8.
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`The claims asserted herein arise under and pursuant to §§10(b) and 20(a) of the
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`Exchange Act (15 U.S.C. §§78j(b) and §78t(a)) and Rule 10b-5 promulgated thereunder by the
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`SEC (17 C.F.R. §240.10b-5).
`
`9.
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`This Court has jurisdiction over the subject matter of this action under 28 U.S.C.
`
`§1331 and §27 of the Exchange Act.
`
`10.
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`Venue is proper in this Judicial District pursuant to §27 of the Exchange Act (15
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`U.S.C. §78aa) and 28 U.S.C. §1391(b). Alphabet is headquartered in this Judicial District.
`
`11.
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`In connection with the acts, conduct and other wrongs alleged in this Complaint,
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`Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,
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`including but not limited to, the United States mail, interstate telephone communications and the
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`facilities of the national securities exchange.
`
`PARTIES
`
`Plaintiff, as set forth in the accompanying Certification, purchased common
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`12.
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`shares of Alphabet at artificially inflated prices during the Class Period and was damaged upon
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`the revelation of the alleged corrective disclosure.
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`13.
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`Defendant Alphabet, Inc. is incorporated in Delaware, and the Company’s
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`principal executive offices are located at 1600 Amphitheatre Parkway Mountain View, CA
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`94043. Alphabet’s securities trade on the NASDAQ under the ticker symbol “GOOG.”
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`14.
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`Defendant Lawrence E. Page (“Page”) has served at all relevant times as the
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`Company’s Chief Executive Officer (“CEO”).
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`15.
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`Defendant Sundar Pichai has served at all relevant times as Google’s Chief
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`Executive Officer (“CEO”).
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 5 of 17
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`16.
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`Defendant Ruth M. Porat (“Porat”) has served at all relevant times as the
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`Company’s CFO.
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`17.
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`Defendants Page, Pichai and Porat are sometimes referred to herein collectively as
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`the “Individual Defendants.”
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`18.
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`The Individual Defendants possessed the power and authority to control the
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`contents of Alphabet’s SEC filings, press releases, and other market communications. The
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`Individual Defendants were provided with copies of the Company’s SEC filings and press
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`releases alleged herein to be misleading prior to or shortly after their issuance and had the ability
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`and opportunity to prevent their issuance or to cause them to be corrected. Because of their
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`positions with the Company, and their access to material information available to them but not to
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`the public, the Individual Defendants knew that the adverse facts specified herein had not been
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`disclosed to and were being concealed from the public, and that the positive representations
`
`being made were then materially false and misleading. The Individual Defendants are liable for
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`the false statements and omissions pleaded herein.
`
`SUBSTANTIVE ALLEGATIONS
`
`Background
`
`Alphabet, through its subsidiary Google, operates a social networking website
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`19.
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`called “Google+” that allows people to communicate with their family, friends, and coworkers.
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`Google+ users ostensibly have the ability to share and restrict the sharing of personal information
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`according to their preferences by changing privacy settings.
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`20.
`
`In developing Google+, Google created an application programming interface
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`(“API”) (a software intermediary that allows two applications to talk to each other) to help
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`smartphone app developers to access profile information of users who, through their privacy
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`settings, had permitted such information to be shared. This profile information included personal
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 6 of 17
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`and contact information of users, as well as information about the persons to whom the users are
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`connected on Google+.
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`21.
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`Between 2015 and March 2018, a software glitch in this Google+ API permitted
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`outside developers to access the personal profile data of Google+ members who had not opted to
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`permit their data to be shared publicly. Indeed, the glitch permitted third parties to access the
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`personal data of users that the users had expressly marked as nonpublic in the Google+ privacy
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`settings.
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`22.
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`In March 2018, Googled discovered this glitch in the API. Google ran tests for
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`two weeks to determine the impact of the glitch, and found that the personal data of 496, 951
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`users had been exposed to third parties. The exposed user data included full names, email
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`addresses, birth dates, gender, profile photos, places lived, occupation and relationship status.
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`Some of the individuals whose data was exposed included paying users of Google’s “G Suite,” a
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`set of applications including Google Docs and Googe Drive, and these users include institutions
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`such as governments, businesses, and schools. As many as 438 third-party applications had
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`access to the unauthorized Google+ data.
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`23.
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`Google’s legal and policy staff drafted a memo regarding the security failure and
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`shared it with senior executives. The memo warned that disclosing the incident would likely
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`trigger “immediate regulatory interest.” The memo further stated that the incident would likely
`
`result “in us coming into the spotlight alongside or even instead of Facebook despite having
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`stayed under the radar throughout the Cambridge Analytica scandal,” referring to the recent
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`scandal in which a British consulting firm acquired and used personal data from Facebook
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`without authorization. The memo also noted that disclosure “almost guarantees Sundar [Pichai]
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`will testify before Congress.”
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 7 of 17
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`24.
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`According to two individuals briefed on the matter, Google’s CEO, Defendant
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`Pichai, was briefed on the plan not to notify users after an internal committee had reached that
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`decision.
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`
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`Materially False and Misleading Statements Issued During the Class Period
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`25.
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`On February 1, 2018, the Company issued its SEC Annual Report on Form 10-K
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`for the fiscal year ending December 31, 2017 (the “1Q 2017 10-K”), in which the Company
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`stated, in Part I, Item 1A “Risk Factors”:
`
`Privacy concerns relating to our technology could damage our reputation and deter
`current and potential users or customers from using our products and services. If our
`security measures are breached resulting in the improper use and disclosure of user
`data, or if our services are subject to attacks that degrade or deny the ability of users to
`access our products and services, our products and services may be perceived as not
`being secure, users and customers may curtail or stop using our products and services,
`and we may incur significant legal and financial exposure.
`
`From time to time, concerns have been expressed about whether our products, services,
`or processes compromise the privacy of users, customers, and others. Concerns about our
`practices with regard to the collection, use, disclosure, or security of personal information
`or other privacy related matters, even if unfounded, could damage our reputation and
`adversely affect our operating results.
`
`Our products and services involve the storage and transmission of users’ and customers’
`proprietary information, and theft and security breaches expose us to a risk of loss of this
`information, improper use and disclosure of such information, litigation, and potential
`liability. Any systems failure or compromise of our security that results in the release of
`our users’ data, or in our or our users’ ability to access such data, could seriously harm
`our reputation and brand and, therefore, our business, and impair our ability to attract and
`retain users. We expect to continue to expend significant resources to maintain state-of-
`the-art security protections that shield against theft and security breaches.
`
`[. . .]
`
`Our security measures may also be breached due to employee error, malfeasance, system
`errors or vulnerabilities, including vulnerabilities of our vendors, suppliers, their
`products, or otherwise. Such breach or unauthorized access, increased government
`surveillance, or attempts by outside parties to fraudulently induce employees, users, or
`customers to disclose sensitive information in order to gain access to our data or our
`users’ or customers’ data could result in significant legal and financial exposure, damage
`to our reputation, and a loss of confidence in the security of our products and services
`that could potentially have an adverse effect on our business.
`
`
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`7
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`

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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 8 of 17
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`[. . .]
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`If an actual or perceived breach of our security occurs, the market perception of the
`effectiveness of our security measures could be harmed and we could lose users and
`customers.
`
`26.
`
`On April 23, 2018, the Company issued its SEC Quarterly Report on Form 10-Q
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`for the period ending March 31, 2018 (the “1Q 2018 10-Q”), in which the Company stated:
`
`Our operations and financial results are subject to various risks and uncertainties,
`including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on
`Form 10-K for the year ended December 31, 2017, which could adversely affect our
`business, financial condition, results of operations, cash flows, and the trading price of
`our common and capital stock. There have been no material changes to our risk factors
`since our Annual Report on Form 10-K for the year ended December 31, 2017
`
`27.
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`On July 23, 2018, the Company issued its SEC Quarterly Report on Form 10-Q
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`for the period ending June 30, 2018 (the “2Q 2018 10-Q”), in which the Company stated:
`
`Our operations and financial results are subject to various risks and uncertainties,
`including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on
`Form 10-K for the year ended December 31, 2017, which could adversely affect our
`business, financial condition, results of operations, cash flows, and the trading price of
`our common and capital stock. There have been no material changes to our risk factors
`since our Annual Report on Form 10-K for the year ended December 31, 2017
`
`28.
`
`The statements referenced in ¶¶ 25-27 above were materially false and/or
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`misleading because: (1) the statements failed to disclose that the Company’s security measures
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`already had failed recently and massively, as Google had exposed the private data of hundreds of
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`thousands of users of Google+ to third parties; (2) damage to the Company’s reputation and
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`operating results and loss of customers from this failure of the Company’s security measures
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`were imminent and inevitable; (3) the Company did not maintain state-of-the-art security
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`protections, and its protection did not shield personal user data against theft and security
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`breaches; and (4) the Company’s security measures already had been breached due to employee
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`error, malfeasance, system errors or vulnerabilities.
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 9 of 17
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`29.
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`The Q1 2018 10-Q and 2Q 2018 10-Q contained certifications pursuant to the
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`Sarbanes-Oxley Act of 2002 by Defendants Page and Porat, stating that “the information
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`contained in the [Q1 2018 10-Q and 2Q 2018 10-Q] fairly presents, in all material respects, the
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`financial condition and results of operations of the Company for the periods presented therein.”
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`30.
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`The statements referenced in ¶ 29 above were materially false and/or misleading
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`because the Q1 2018 10-Q and 2Q 2018 10-Q did not fairly present, in all material respects, the
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`financial condition and results of operations of the Company for the periods presented therein,
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`for the reasons articulated above.
`
`The Truth Begins To Emerge
`
`31.
`
`On October 8, 2018, citing “people briefed on the incident and documents
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`reviewed,” The Wall Street Journal reported that in March 2018, Alphabet’s subsidiary Google
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`discovered a software glitch in its Google+ social network that had exposed users’ personal data
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`to third parties, but “opted not to disclose the issue . . . in part because of fears that doing so
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`would draw regulatory scrutiny and cause reputational damage.” Following this news,
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`Alphabet’s stock price fell $67.75 per share, or 5.9%, over the following two trading sessions, to
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`close at $1,081.22 per share on October 10, 2018.
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`32.
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`Following revelation of the security breach, Google announced plans to shut
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`down Google+.
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`33.
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`As a result of Defendants’ wrongful acts and omissions, and the precipitous
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`decline in the market value of the Company’s securities, Plaintiff and other Class members have
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`suffered significant losses and damages.
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`PLAINTIFF’S CLASS ACTION ALLEGATIONS
`
`Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
`
`34.
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`Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 10 of 17
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`otherwise acquired Alphabet common shares traded on the NASDAQ during the Class Period
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`(the “Class”); and were damaged upon the revelation of the alleged corrective disclosures.
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`Excluded from the Class are Defendants herein, the officers and directors of the Company, at all
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`relevant times, members of their immediate families and their legal representatives, heirs,
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`successors or assigns and any entity in which Defendants have or had a controlling interest.
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`35.
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`The members of the Class are so numerous that joinder of all members is
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`impracticable. Throughout the Class Period, Alphabet common shares were actively traded on
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`the NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and
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`can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds
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`or thousands of members in the proposed Class. Record owners and other members of the Class
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`may be identified from records maintained by Alphabet or its transfer agent and may be notified
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`of the pendency of this action by mail, using the form of notice similar to that customarily used
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`in securities class actions.
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`36.
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`Plaintiff’s claims are typical of the claims of the members of the Class as all
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`members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
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`federal law that is complained of herein.
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`37.
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`Plaintiff will fairly and adequately protect the interests of the members of the
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`Class and has retained counsel competent and experienced in class and securities litigation.
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`Plaintiff has no interests antagonistic to or in conflict with those of the Class.
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`38.
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`Common questions of law and fact exist as to all members of the Class and
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`predominate over any questions solely affecting individual members of the Class. Among the
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`questions of law and fact common to the Class are:
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`
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`whether the federal securities laws were violated by Defendants’ acts as
`alleged herein;
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 11 of 17
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`
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`
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`
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`whether statements made by Defendants to the investing public during the
`Class Period misrepresented material facts about the financial condition,
`business, operations, and management of Alphabet;
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`whether Defendants caused Alphabet to issue false and misleading
`financial statements during the Class Period;
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`whether Defendants acted knowingly or recklessly in issuing false and
`misleading financial statements;
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`whether the prices of Alphabet securities during the Class Period were
`artificially inflated because of Defendants’ conduct complained of herein;
`and
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`whether the members of the Class have sustained damages and, if so, what
`is the proper measure of damages.
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`A class action is superior to all other available methods for the fair and efficient
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`
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`
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`39.
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`adjudication of this controversy since joinder of all members is impracticable. Furthermore, as
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`the damages suffered by individual Class members may be relatively small, the expense and
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`burden of individual litigation make it impossible for members of the Class to individually
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`redress the wrongs done to them. There will be no difficulty in the management of this action as
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`a class action.
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`40.
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`Plaintiff will rely, in part, upon the presumption of reliance established by the
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`fraud-on-the-market doctrine in that:
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`
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`
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`
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`
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`
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`Defendants made public misrepresentations or failed to disclose material
`facts during the Class Period;
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`the omissions and misrepresentations were material;
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`Alphabet common shares are traded in efficient markets;
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`the Company’s shares were liquid and traded with moderate to heavy
`volume during the Class Period;
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`the Company traded on the NASDAQ, and was covered by multiple
`analysts;
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`11
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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 12 of 17
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`
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`
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`the misrepresentations and omissions alleged would tend to induce a
`reasonable investor to misjudge the value of the Company’s common
`shares; and
`
`Plaintiff and members of the Class purchased and/or sold Alphabet
`common shares between the time the Defendants failed to disclose or
`misrepresented material facts and the time the true facts were disclosed,
`without knowledge of the omitted or misrepresented facts.
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`41.
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`Based upon the foregoing, Plaintiff and the members of the Class are entitled to a
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`presumption of reliance upon the integrity of the market.
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`42.
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`Alternatively, Plaintiff and the members of the Class are entitled to the
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`presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State
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`of Utah v. United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material
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`information in their Class Period statements in violation of a duty to disclose such information,
`
`as detailed above.
`
`COUNT I
`
`Violation of Section 10(b) of The Exchange Act and Rule 10b-5
`Against All Defendants
`
`Plaintiff repeats and realleges each and every allegation contained above as if
`
`43.
`
`fully set forth herein.
`
`44.
`
`This Count is asserted against Alphabet and the Individual Defendants and is
`
`based upon Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated
`
`thereunder by the SEC.
`
`45.
`
`During the Class Period, Alphabet and the Individual Defendants, individually
`
`and in concert, directly or indirectly, disseminated or approved the false statements specified
`
`above, which they knew or deliberately disregarded were misleading in that they contained
`
`misrepresentations and failed to disclose material facts necessary in order to make the statements
`
`made, in light of the circumstances under which they were made, not misleading.
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`12
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`

`

`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 13 of 17
`
`
`
`46.
`
`Alphabet and the Individual Defendants violated §10(b) of the 1934 Act and Rule
`
`10b-5 in that they:
`
`
`
`
`
`
`employed devices, schemes and artifices to defraud;
`made untrue statements of material facts or omitted to state material facts
`necessary in order to make the statements made, in light of the
`circumstances under which they were made, not misleading; or
`engaged in acts, practices and a course of business that operated as a fraud
`or deceit upon plaintiff and others similarly situated in connection with
`their purchases of Alphabet common shares during the Class Period.
`
`47.
`
`Alphabet and the Individual Defendants acted with scienter in that they knew that
`
`
`
`the public documents and statements issued or disseminated in the name of Alphabet were
`
`materially false and misleading; knew that such statements or documents would be issued or
`
`disseminated to the investing public; and knowingly and substantially participated, or acquiesced
`
`in the issuance or dissemination of such statements or documents as primary violations of the
`
`securities laws. These Defendants by virtue of their receipt of information reflecting the true
`
`facts of Alphabet, their control over, and/or receipt and/or modification of Alphabet allegedly
`
`materially misleading statements, and/or their associations with the Company which made them
`
`privy to confidential proprietary information concerning Alphabet, participated in the fraudulent
`
`scheme alleged herein.
`
`48.
`
`Individual Defendants, who are the senior officers and/or directors of the
`
`Company, had actual knowledge of the material omissions and/or the falsity of the material
`
`statements set forth above, and intended to deceive Plaintiff and the other members of the Class,
`
`or, in the alternative, acted with reckless disregard for the truth when they failed to ascertain and
`
`disclose the true facts in the statements made by them or other Alphabet personnel to members of
`
`the investing public, including Plaintiff and the Class.
`
`49.
`
`As a result of the foregoing, the market price of Alphabet common shares was
`
`artificially inflated during the Class Period. In ignorance of the falsity of Alphabet’s and the
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`13
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`

`

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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 14 of 17
`
`
`Individual Defendants’ statements, Plaintiff and the other members of the Class relied on the
`
`statements described above and/or the integrity of the market price of Alphabet common shares
`
`during the Class Period in purchasing Alphabet common shares at prices that were artificially
`
`inflated as a result of Alphabet’s and the Individual Defendants’ false and misleading statements.
`
`50.
`
`Had Plaintiff and the other members of the Class been aware that the market price
`
`of Alphabet common shares had been artificially and falsely inflated by Alphabet’s and the
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`Individual Defendants’ misleading statements and by the material adverse information which
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`Alphabet’s and the Individual Defendants did not disclose, they would not have purchased
`
`Alphabet’s common shares at the artificially inflated prices that they did, or at all.
`
`51.
`
`As a result of the wrongful conduct alleged herein, Plaintiff and other members of
`
`the Class have suffered damages in an amount to be established at trial.
`
`52.
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`By reason of the foregoing, Alphabet and the Individual Defendants have violated
`
`Section 10(b) of the 1934 Act and Rule 10b-5 promulgated thereunder and are liable to the
`
`plaintiff and the other members of the Class for substantial damages which they suffered in
`
`connection with their purchase of Alphabet common shares during the Class Period.
`
`COUNT II
`
`Violation of Section 20(a) of The Exchange Act
`Against The Individual Defendants
`
`Plaintiff repeats and realleges each and every allegation contained in the
`
`53.
`
`foregoing paragraphs as if fully set forth herein.
`
`54.
`
`During the Class Period, the Individual Defendants participated in the operation
`
`and management of Alphabet, and conducted and participated, directly and indirectly, in the
`
`conduct of Alphabet’s business affairs. Because of their senior positions, they knew the adverse
`
`non-public information regarding the Company’s inadequate internal safeguards in data security
`
`protocols.
`
`
`
`14
`
`

`

`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 15 of 17
`
`
`
`55.
`
`As officers and/or directors of a publicly owned company, the Individual
`
`Defendants had a duty to disseminate accurate and truthful information with respect to
`
`Alphabet’s financial condition and results of operations, and to correct promptly any public
`
`statements issued by Alphabet which had become materially false or misleading.
`
`56.
`
`Because of their positions of control and authority as senior officers, the
`
`Individual Defendants were able to, and did, control the contents of the various reports, press
`
`releases and public filings which Alphabet disseminated in the marketplace during the Class
`
`Period. Throughout the Class Period, the Individual Defendants exercised their power and
`
`authority to cause Alphabet to engage in the wrongful acts complained of herein. The Individual
`
`Defendants therefore, were “controlling persons” of Alphabet within the meaning of Section
`
`20(a) of the Exchange Act. In this capacity, they participated in the unlawful conduct alleged
`
`which artificially inflated the market price of Alphabet common shares.
`
`57.
`
`By reason of the above conduct, the Individual Defendants are liable pursuant to
`
`Section 20(a) of the Exchange Act for the violations committed by Alphabet.
`
`PRAYER FOR RELIEF
`
`WHEREFORE, Plaintiff demands judgment against Defendants as follows:
`
`A.
`
`Determining that the instant action may be maintained as a class action under
`
`Rule 23 of the Federal Rules of Civil Procedure, and certifying Plaintiff as the Class
`
`representative;
`
`B.
`
`Requiring Defendants to pay damages sustained by Plaintiff and the Class by
`
`reason of the acts and transactions alleged herein;
`
`C.
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`Awarding Plaintiff and the other members of the Class prejudgment and post-
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`judgment interest, as well as their reasonable attorneys’ fees, expert fees and other costs; and
`
`D.
`
`Awarding such other and further relief as this Court may deem just and proper.
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`15
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`

`

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`Case 4:18-cv-06245-JSW Document 1 Filed 10/11/18 Page 16 of 17
`
`
`
`
`
`DEMAND FOR TRIAL BY JURY
`
`Plaintiff hereby demands a trial by jury.
`
`Dated: October 11,

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