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`United States District Court
`NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
`
`PHILLIP R. CRUTCHFIELD,
`Individually and on Behalf of All Others
`Similarly Situated
`
`V.
`
`MATCH GROUP, INC., AMANDA W.
`GINSBERG, and GARY SWIDLER
`
`§
`§
`§
`§
`§
`§
`§
`§
`
`CIVIL ACTION NO. 3:l 9-CV-2356-S
`
`MEMORANDUM OPINION AND ORDER
`
`This Memorandum Opinion and Order addresses Defendants' Motion to Dismiss ("Motion
`
`to Dismiss") [ECF No. 38]. 1 For the following reasons, the Court GRANTS the Motion.
`
`I.
`
`FACTUAL BACKGROUND
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`This is a putative securities class action brought by co-lead Plaintiffs Phillip Crutchfield
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`and Samir Ali Cherif Benouis ("Plaintiffs") alleging violations of Sections 1 0(b) and 20(a) of the
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`Securities Exchange Act of 1934 ("Exchange Act"), and Securities and Exchange Commission
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`("SEC") Rule 1 0b-5 promulgated thereunder, against Defendants Match Group, Inc. ("Match"),
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`Amanda Ginsberg ("Ginsberg"), and Gary Swidler ("Swidler"). The putative class consists of all
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`persons and entities who purchased or otherwise acquired common stock of Match between
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`November 6, 2018, and January 31, 2020 ("Relevant Time Period"). See ECF No. 3 7, Amended
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`Class Action Complaint ("Amended Complaint" or "CAC") ~ l.
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`Match is a publicly traded company that operates various dating and matchmaking
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`websites, including Match.com, Tinder, PlentyofFish, Meetic, and Pairs, among others. Id. ~~ 2,
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`14. During the Relevant Time Period, Swidler was Match's Chief Financial Officer ("CFO"), and
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`1 This case was transferred from the docket of Judge Ada Brown to the docket of this Court on February 2, 2021.
`See ECF No. 44.
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`

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`Ginsberg was Match's Chief Executive Officer ("CEO").
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`Id. ~~ 15-16. Match's revenue is
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`primarily derived from registered members who subscribe to a recurring "premium" or "paid"
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`membership. Id.~~ 2, 34. Members not subscribed to a premium membership can still use Match's
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`basic functionalities for free. See id. ~ 31. In addition to using typical reporting metrics like
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`revenues and earnings, Match tracks its performance by evaluating the conversion rate from unpaid
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`to paid memberships, "paid member count" ("PMC"), that is, the number of members on premium
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`or paid membership accounts, and "average revenue per user." Id.~~ 2, 47. Match's public filings
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`and statements also routinely refer to "Subscribers," who are "users who purchase a subscription
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`to one of[Match's] products," and "Average Revenue per Subscriber" ("ARPU"), which is "Direct
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`Revenue from Subscribers in the relevant measurement period . . . divided by the Average
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`Subscribers in such period ... further divided by the number of calendar days in such period," as
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`pertinent operating metric terms. ECF No. 39, Appendix of Exhibits in Support of Defendants'
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`Motion to Dismiss ("Defs.' App.") 38,163,323,460,493,525, 576,617,665, 699, 747. One of
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`Match's key goals was to conveti unpaid members into paid members. CAC ~ 34.
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`According to the 170-page Amended Complaint, Match's revenue growth during the
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`Relevant Time Period was driven, at least in part, by widespread fraudulent accounts consisting of
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`scammers and "bots" (autonomous programs that can interact with systems or users). 2 Id. ~ 36.
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`Such fraud was "widespread knowledge" at Match, and Ginsberg and Swidler-as senior
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`leaders-allegedly knew the statistics on the number of fraudulent accounts and had detailed
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`discussions about Match's fraud problem with the Product Division or developers. Id. ~~ 39, 50.
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`Match's fraud problem was also discussed during company-wide meetings. Id. While Match had
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`a Fraud Department to flag and remove scammers, the Amended Complaint alleges that the
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`2 The Amended Complaint also details allegations that Match brands failed to screen properly for sex offenders and
`felons. See id. ii 5 8-65.
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`2
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`department was insufficient, as it was comprised of only eight members who worked around the
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`clock to review the hundreds of accounts flagged per day. 3 Id. ~ 42. At Match.com, customer
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`service representatives were also responsible for detecting fraudulent accounts that had slipped
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`through Match's automatic flagging process. Id. ~ 43.
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`Plaintiffs allege that these review measures were inadequate. See id. ~ 44. One confidential
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`witness-a Match.com senior finance manager-reported that "15% of all Match.com
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`membership registrations were fraudulent." Id. A confidential witness at Tinder similarly stated
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`that approximately 20% of Tinder's accounts were bots and/or fraudulent, and that Tinder did not
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`adjust its membership numbers in financial reports to account for these fraudulent accounts. Id.
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`~ 45. According to that witness, there was also "no doubt" that some fraudulent account holders
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`paid to have premium Tinder account features to further advance their fraudulent activities. Id.
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`Defendants allegedly knew of these fraudulent users but failed to take necessary actions to
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`address the problem, preferring instead to focus on the revenue-producing metrics. Id. ~ 46. In
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`supp01t of this contention, Plaintiffs assert that Ginsberg and Swidler participated in monthly 30-
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`minute presentations and received a monthly report that summarized Match brands' financial
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`performance and forecasts using data that "did not adjust out the fraudulent accounts."4
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`Id.
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`Plaintiffs further allege that rather than striving to achieve accurate forecasts to identify and reduce
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`fraudulent account activity, Ginsberg and Swidler were more focused on tracking revenue-
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`3 It is unclear from the face of the Amended Complaint whether the Fraud Department is limited to Match.corn only
`or if the department was part of Match, more broadly. See id.1J 42 (referring inconsistently to the Fraud Departrnent(s)
`at Match and Match.corn).
`
`4 The Amended Complaint also asserts more generally that Ginsberg and Swidler would have been aware of any "red
`flags" regarding the effects of fraudulent users on Match brands' financial metrics given their interactions with leaders
`of the respective brands, their prior roles with specific brands, and their presence at forecast meetings with other Match
`executives. See id. 111 64, 177-79. According to Plaintiffs, everyone in the headquarters building had knowledge of
`the number of fraudulent accounts, and a highly visible "wall of screens" at Match's headquarters tracked Match's
`website usage levels and traffic patterns and, in turn, could indicate fraudulent activity. Id. 1180.
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`3
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`generating data, such as each brand's PMC or ARPU. Id. ,i,i 47-48. And to ensure that Match met
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`previous forecasts, and to make it appear as if its membership was steadily growing on its earnings
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`reports, Match purportedly employed various "gimmicks" to increase closing numbers, such as
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`offering heavy discounts near the end of a quarter or year to increase PMC, upselling packages,
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`reducing payment rates, and adjusting refund policies to maximize paid membership retention. 5
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`Id. The Amended Complaint claims that both Ginsberg and Swidler were well aware of these
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`efforts. Id. ,i 48. Another alleged strategy to increase paid subscriptions was to notify non-paying
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`users that other members had "liked" them or sent them messages-even if those members were
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`later discovered to be fraudulent-to entice the non-paying users to upgrade their memberships,
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`which would enable them to view the "likes" and read the messages.
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`Id. ,i,i 66-69 ( detailing
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`Match.corn's supposed marketing strategy).
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`The Amended Complaint also contends that the effect of fraudulent activities on Match's
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`financial data was a "point of frustration" for Match and, particularly, for Ginsberg and Swidler.
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`Id.
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`,i,i 49, 91. Specifically, Plaintiffs assert that as PlentyofFish's employees weeded out
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`fraudulent accounts, its PMC and ARPU numbers would also decrease-which led to PlentyofFish
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`consistently lowering its previously forecasted financial numbers. Id. According to the Amended
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`Complaint, Match only paid attention to its fraud problem when it created a variance on forecasted
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`PMC or ARPU figures. See id. ,ii] 49, 54, 65.
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`These fraudulent accounts were also relevant to an investigation and lawsuit by the Federal
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`Trade Commission ("FTC"). In March 2017, the FTC requested information and documents from
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`Match in connection with a civil investigation into Match.corn's business practices. Id. ,i 153.
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`5 The Amended Complaint also alleges that Match used deceptive promotional offers and a purposefully convoluted
`and deceptive billing, cancellation, and refund model to increase and retain its paying-member base. See id. ~~ 70-
`84.
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`4
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`Several months later, in November 2018, the FTC offered to settle potential claims regarding
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`Match.corn's marketing, chargeback, and online cancellation practices via a consent judgment,
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`requiring ce11ain changes in Match.corn's business practices, and a $60 million payment.
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`Id.
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`Match and the FTC discussed this settlement proposal but did not reach a resolution. Id. On
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`August 7, 2019, the FTC voted to bring claims against Match and referred the case to the U.S.
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`Depm1ment of Justice ("DOJ"). Id. On September 25, 2019, Match reported that the DOJ opted
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`not to pursue a civil case and referred the matter back to the FTC, which then filed a lawsuit against
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`Match. Id. The lawsuit alleged that Match.com, among other things, "us[ ed] artificial love interest
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`ads to deceive customers into buying or upgrading subscriptions, fail[ ed] to resolve disputed
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`charges, and intentionally ma[ de] it difficult to cancel subscriptions." Id. , 165.
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`A.
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`Alleged Misrepresentations
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`Against this factual backdrop, Plaintiffs allege that Match defrauded
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`investors.
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`Specifically, Plaintiffs asse11 that Match made material misstatements and/or omissions, regarding:
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`(1) the integrity of Match's membership base; (2) financial results reported in public filings;
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`(3) certifications that Match had adequate internal controls; and (4) the FTC's investigation and
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`lawsuit. See id. , 88. Plaintiffs refer to these four categories of alleged misstatements respectively
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`as: (1) Membership Integrity Fraud; (2) Reported Results Fraud; (3) Internal Controls Fraud; and
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`( 4) FTC Investigation Fraud. Id.
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`(1)
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`Integrity of Match's Membership Base
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`According to the Amended Complaint, Defendants made materially false and misleading
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`misrepresentations regarding the integrity and quality of Match's membership in various public
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`statements and filings. See id. , 89. They are as follows:
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`• On November 6, 2018, Match issued a press release announcing its Q3 2018
`financials, in which Ginsberg stated that Match "delivered another quarter
`of strong top and bottom line growth" and highlighted Match's "8.1
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`5
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`million" Average Subscribers, 29% growth in Total Revenue, and 6%
`ARPU growth from the last year. See id. ~ 90.
`
`• On November 7, 2018, Match held a conference call to discuss Q3 2018
`financials, during which Defendants reiterated that "average subscribers
`reached nearly 8.1 million in Q3, up 23% year-over-year" and "subscriber
`and [ARPU] growth led to total revenue of $444 million for the quatter."
`Defendants also remarked on Match's growth in earnings before interest,
`tax, depreciation,
`and
`amortization
`("EBITDA") and expressed
`"optimis[m ]" that its "enhancements to the customer experience" would
`lead to "improved organic registrations." Id. ~~ 92-93.
`
`• On February 6, 2019, Match issued a press release announcing Q4 2018 and
`full-year 2018 financial results, representing that Match's "Total Revenue
`grew 21 % over the prior year quarter," driven by growth in Match's number
`of"Average Subscriber[s]" and ARPU. The press release also stated that
`"Average Subscribers increased to 8.2 million." Id.~ 95.
`
`• On February 6, 2019, Yahoo! Finance published an article titled "Match
`Beats Estimates as Tinder's Growth is Fueled by International Users," in
`which Ginsberg stated that 2018 marked "the best year in our history for
`shareholders." Id.~ 97.
`
`• On Februmy 7, 2019, Match held a conference call to discuss Q4 2018 and
`full-year 2018 financial results, during which Defendants restated that
`"average subscribers reached over 8.2 million" and attributed Match's "total
`revenue growth of 21 %" to the "17% subscriber and 4% ARPU growth."
`Defendants also stated that "over the past 3 years, [Match has] grown total
`revenue at a 21 % annual rate, with 2018 total revenue exceeding $1. 7
`billion." Id. ~ 99.
`
`• On February 7, 2019, Match held a conference call to discuss Q4 2018
`financial results, during which Defendants forecasted that "Match and
`Meetic continue to evolve their product, and we think that those brands will
`see growth again heading into next year as they resonate with serious(cid:173)
`minded daters in their 30s and 40s." Id.~ 101.
`
`• On May 7, 2019, Match issued a press release announcing Ql 2019
`financials, in which Match stated that "Total Revenue grew 14% over the
`prior year quarter," "Average Subscribers increased 16% to 8.6 million ...
`in the prior year quarter," and, "excluding foreign exchange effects, ARPU
`... increase[d] 4% over the prior year qumter." Id. ~ 105.
`
`• On May 8, 2019, Ginsberg appeared on CNBC's "Squawk Alley" and stated
`that "Tinder did drive a ton of growth this quarter. And we hit actually a
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`big milestone, at the end of the quarter we had five million subscribers." Id.
`~ 103.
`
`• On May 8, 2019, Match held a conference call to discuss QI 2019 financial
`results, during which Defendants restated that "average subscribers across
`[Match's] brands reached over 8.6 million in QI." Defendants also reported
`stability in Match's ARPU and growth in direct revenue from N01ih
`America and international markets. Id. ~ I 07.
`
`• On August 6, 2019, Match issued a press release announcing Q2 2019
`financials, in which Match noted growth in Total Revenue by "18% over
`the prior year quarter" and that "Average Subscribers increased ... to 9.1
`million." Id. ~ 109.
`
`• On August 7, 2019, Match held a conference call to discuss Q2 2019
`financial results, during which Defendants reiterated
`that "average
`subscribers across the company's brands reached over 9 million in Q2" and
`that Match reached "$498 million of total revenue for the qumier," driven
`by growth in subscribers and ARPU. Defendants also stated that for "the
`first time in [Match's] history, the number of international subscribers
`exceeded North American subscribers." Id. ii 111.
`
`• On August 7, 2019, Match held a conference call to discuss Q2 2019
`financials, during which Defendants expressed that Match has "made a lot
`of progress over the last couple of quarters, satisfactory rates are up,
`conversions up, [Match is] feeling really optimistic." Id.~ 113.
`
`• On August 9, 2019, Yahoo! Finance published an miicle titled "Match
`Group Growth Accelerates," in which Ginsberg is quoted as saying that
`Match's "growth accelerated and our momentum enabled us to increase our
`full-year outlook while investing in the future." Id. ~ 115.
`
`• On September 10, 2019, at the Deutsche Bank 2019 Technology
`Conference in Las Vegas, Nevada, Swidler stated that subscriber growth for
`Match's brands in Canada "has basically stayed on trend from the Facebook
`launch of dating back in November of '18 to today. You don't see any
`interruption or effect on subscriber growth in Canada from the Facebook
`launch." Regarding other international markets, Match remarked that there
`was "acceleration of Tinder subscriber growth" during that same period.
`Swidler added that Match does not "(s]ee any deceleration of Tinder as a
`result of Face book" and that Tinder is "very pleased with growth that [it is]
`showing on a year per year basis" in other countries, "even with Facebook
`dating in the market." Swidler then forecasted that Match is "on track ...
`to do what [it] thought this year." Id.~~ 117-18.
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`• On November 5, 2019, Match issued a press release announcing its Q3 2019
`financial results, stating that "Average Subscribers increased ... to 9 .6
`million" and "Total Revenue grew 22% over the prior year quarter." Id.
`'ii 120.
`
`• On November 6, 2019, Match held a conference call to discuss Q3 2019
`financials, during which Defendants stated that Match "had another terrific
`quarter in Q3 with accelerated growth on top and bottom line" and
`"continued excellent performance at Tinder and improvement in non-Tinder
`subscriber trends." Id. 'ii 122.
`
`• On November 6, 2019, Match held a conference call to discuss its Q3 2019
`financials, where Defendants stated that "year-over-year growth in average
`subscribers across [Match's] brands accelerated in Q3, with overall average
`subscriber growth of 19%," as compared with a year ago. Defendants stated
`that "[i]nternational subscriber growth was particularly strong, driven
`primarily by Tinder and Pairs," but that other "new bets" are contributing
`to subscriber growth as well, "giv[ing Match] confidence that [it] will have
`modest non-Tinder year-over-year subscriber growth in Q4." Defendants
`also remarked that the number of average subscribers is "just over 9.6
`million" and overall company ARPU increased year-over-year. Id. 'ii 124.
`
`• On December 2, 2019, ProPub/ica published an article titled, "Tinder Lets
`Known Sex Offenders Use the App. It's Not the Only One," in which an
`unidentified Match spokesperson told Columbia Journalism Investigations
`that Match could not implement a uniform screening protocol for sex
`offenders because Match does not collect enough information from free
`users and "some paid subscribers." The spokesperson added that "[t]here
`are definitely registered sex offenders on [Match's] free products." The
`article also quotes Ginsberg as saying, "If there's bad behavior on one app,"
`Match "can identify that user, [and] we'll kick him off all the apps." Id.
`'il'il 126-28.
`
`Plaintiffs contend that each of the above statements was materially false and misleading for one or
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`more of the following reasons:
`
`• A "significant" percentage of accounts on Match's website brands were
`fraudulent, and Match's forecasts and operations reports generally did not
`adjust to exclude fraudulent accounts. Match also failed to disclose to
`investors that some paid subscribers were fraudulent users, fraudulent
`activity generated some of Match's marketing emails, and Match had
`inadequate staffing and resources to combat fraud.
`
`• Match focused more on financial metrics, including revenues, EBIDTA,
`PMC, and ARPU, and increasing membership base, than on protecting users
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`from fraudulent or otherwise dangerous account holders. Match only
`addressed fraud if it affected the forecasted PMC or ARPU numbers for its
`brands.
`
`• Match's increase in users stemmed from deceptive marketing practices that
`"piggy-backed" on the existence of fraudulent accounts. Such conduct
`included Match using communications from fraudulent account holders to
`generate deceptive marketing emails to entice non-paying users to subscribe
`to access the purported communications from other account holders. And
`once subscribed, the member would face "deceptive guarantees" and
`"convoluted billing practices" preventing the member from cancelling his
`or her account.
`
`• Match.com, specifically, employed deceptive and unfair practices to induce
`customers to subscribe and keep them subscribed.
`
`• Match failed to disclose that its marketing practices, which were "based on
`fraudulent accounts," were the basis of an ongoing FTC investigation.
`
`• Match brands generally did not affirmatively screen for sex offenders or
`other bad actors. And Match's responses to user complaints regarding sex
`offenders often failed to prevent fmther harm.
`
`• Match misrepresented that the FTC's investigation regarding Match's
`marketing practices based on fraudulent accounts "lack[ ed] merit," when,
`in actuality, the conduct was "sufficiently egregious and illegal that the FTC
`would file a complaint."
`
`See generally id. ,r,r 90-129.
`
`(2)
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`Match's Reported Financial Pe1formance
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`Plaintiffs also allege that Defendants' public filings and statements rep01ted positive
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`financial results and information that were materially false and misleading. See id. ,r 136.
`
`Specifically, Plaintiffs assert that Match's Form 10-Qs and Form 10-K filed during the Relevant
`
`Time Period repo1ted financial results and metrics regarding Match's revenues, earnings, PMC,
`
`and ARPU, among other financial data, but omitted that Match's financial figures included data
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`from fraudulent accounts, including paid subscriptions, by "scammers, fraudsters, 'bots,' sex
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`offenders, and other dangerous site users." Id. The Amended Complaint also alleges that Match
`
`failed to disclose the risks associated with fraudulent conduct. See id.
`
`(3)
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`Match's Internal Controls
`
`The Amended Complaint alleges that Defendants materially misrepresented the quality and
`
`status of Match's "internal controls" when Ginsberg and Swidler certified under the Sarbanes-
`
`Oxley Act of2002 ("SOX") that Match's Form 10-Qs and Form 10-K filed during the Relevant
`
`Time Period, "d[ o] not contain any untrue statement of material fact or omit to state a material fact
`
`necessary to make the statements made ... not misleading" and do "fairly present in all material
`
`respects the financial condition, results of operations[,] and cash flows of [Match]." Id. ~11137-
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`42. Plaintiffs also allege that the SOX certifications were false and misleading by claiming to have
`
`"disclosed ... to [Match's] auditors and the audit committee of [Match's] board of
`directors ... [a]ll significant deficiencies and material weaknesses in the design or
`operation of internal control over financial reporting which are reasonably likely to
`adversely affect [Match's] ability to record, process, summarize[,] and report
`financial information; and ... [ a ]ny fraud, whether or not material, that involves
`management or other employees who have a significant role in [Match's] internal
`control over financial reporting."
`
`Id. ~ 138. According to the Amended Complaint, these SOX certifications were false and
`
`misleading for the same reasons underlying the above-described Membership Integrity Fraud(cid:173)
`
`i.e., that a significant percentage of Match brand accounts were fraudulent, Match did not adjust
`
`its financial reports to exclude or otherwise address these fraudulent accounts, Match focused more
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`on financial metrics than protecting users, Match's user base increase stemmed from deceptive
`
`marketing, billing, and cancellation practices that "piggy-backed" on the existence of fraudulent
`
`accounts, and Match generally did not affirmatively screen for sex offenders or other bad actors.
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`Id.~ 143. Regarding Ginsberg and Swidler specifically, the Amended Complaint alleges that they
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`failed to disclose the significant deficiencies or material weaknesses in the design operation of
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`Match's internal controls and "their ongoing fraud" by "refus[ing] to adjust forecasts and reported
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`results to eliminate fraudulent accounts ... [ and] willfully turning a blind eye toward" the alleged
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`fraud. Id
`
`(4)
`
`The FTC's Investigation and Lawsuit
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`Last, Defendants allegedly made several materially false and misleading public statements
`
`regarding the merits of the FTC investigation and lawsuit. Id ,r 144. Specifically, the Amended
`
`Complaint alleges that the following public statements were false and misleading:
`
`• Match's February 28, 2019 Form 10-K and May 9, 2019 Form 10-Q stating:
`
`to
`legal challenges
`the FTC's
`that
`Match Group believes
`Match.corn's practices, policies, and procedures are without merit
`and is prepared to vigorously defend against them.
`
`Id ,r,r 145, 149.
`
`• Match's August 8, 2019 Form 10-Q stating:
`
`Match Group believes that the FTC's claims regarding Match.corn's
`practices, policies, and procedures are without merit and is prepared
`to defend vigorously against them.
`
`Id ,1151.
`
`• Match's September 25, 2019 press release titled "Match Responds to FTC Lawsuit"
`stating:
`
`The DOJ opted not to pursue the civil case and referred it back to
`the FTC who then filed a lawsuit against us today making
`completely meritless allegations
`supported by consciously
`misleading figures.
`
`Fraud isn't good for business. That's why we fight it. We catch and
`neutralize 85% of potentially improper accounts in the first four
`hours, typically before they are even active on the site, and 96% of
`improper accounts within a day.
`
`For nearly 25 years Match.com has been focused on helping people
`find love and fighting the criminals that try to take advantage of
`users. We've developed industry leading tools and AI that block
`96% of bots and fake accounts from our site within a day and are
`relentless in our pursuit to rid our site of these malicious accounts.
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`The FTC has misrepresented internal emails and relied on cherry(cid:173)
`picked data to make outrageous claims and we intend to vigorously
`defend ourselves against these claims in court.
`
`• Match's November 6, 2019 statements during a conference call, where
`"Defendants" denied the FTC's allegations,6 calling them "meritless" and stating
`that Match will "defend [itself] against that vigorously." Id.~ 155.
`
`• Match's November 7, 2019 Form 10-Q stating:
`
`Match Group believes that the FTC' s claims regarding Match.com' s
`practices, policies, and procedures are without merit and will defend
`vigorously against them.
`
`Id.~ 157.
`
`The Amended Complaint alleges that while Match's February 28, 2019 Form 10-K served as a
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`"partial corrective disclosure," incrementally decreasing Match's stock price, Defendants muted
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`the corrective effects of the disclosure by "falsely reassur[ing] investors that the FTC investigation
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`[ was] meritless," thereby buoying Match's stock price in the face of negative revelations.
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`Id.
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`~ 148. These alleged false reassurances continued throughout the Relevant Time Period and,
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`according to Plaintiffs, were false and misleading for the same reasons Defendants' statements
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`regarding Match's membership and internal controls were allegedly deceptive. See id.~~ 149-58.
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`B.
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`Partial Corrective Disclosures
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`Defendants' various misrepresentations were allegedly incrementally revealed through a
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`series of"partial corrective disclosures" causing Match's stock inflation to "be removed in stages."
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`Id.~ 159. The first drop occurred after Match filed its 2018 10-K in which Match disclosed the
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`FTC's request for documents and civil investigation. Id. The 10-K also disclosed the FTC's
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`November 2018 proposal to settle potential claims regarding Match.cam's marketing, chargeback,
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`6 The Amended Complaint also references "DOJ complaints," but the DOJ appears to have declined to pursue a civil
`case against Match-referring the matter back to the FTC. Id. ii 153, 155.
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`and online cancellation practices via a consent judgment mandating certain business practice
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`changes and payment of $60 million.7 Id. After Match filed this 10-K, Match's stock price fell
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`$0.40, or 0.72%, from $55.78 on February 27, 2019, to close at $55.38 on February 28, 2019. Id.
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`On August 8, 2019, Match filed Form 10-Q for Q2 of 2019, in which Match disclosed that
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`on August 7, 2019, the FTC voted to assert claims against Match and referred the matter to the
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`DOJ.8 Id.~ 162. Following this disclosure, Match's stock price fell $1 .54, or 1.8%, from $87.17
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`per share on August 8, 2019, to close at $85.63 per share on August 9, 2019. Id.~ 163. The
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`Amended Complaint alleges that as news of the FTC's action spread to Match's investors, Match's
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`stock price dropped another $2.99, or 3.5%, by the close of the next trading day, August 12, 2019.
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`Id.~ 164.
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`About a month and a half later, on September 25, 2019, the FTC announced in a press
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`release that it had sued Match.com for, among other things, "using artificial love interest ads to
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`deceive customers into buying or upgrading subscriptions, failing to resolve disputed charges, and
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`intentionally making it difficult to cancel subscriptions." Id. ~ 165. As a result of this news, the
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`Amended Complaint alleges Match's share price fell $1.39, approximately 2%, from $72.83 per
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`share on September 24, 2019, to close at $71.44 per share on September 25, 2019. Id.~ 166.
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`A day before filing its Form 10-Q regarding Q3 financials, on November 6, 2019, Match
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`allegedly held an earnings call with analysts and investors during which Defendants disclosed that
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`revenues were affected by increased legal costs from several lawsuits and Match expected
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`7 These statements prefaced Defendants' alleged misrepresentation regarding the veracity of the FTC's legal
`challenges. See id. 1145.
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`8 The Amended Complaint appears to erroneously note that Match filed its Form 10-Q for QJ financials on August 9,
`2019. See id. il1 134, 141, 151 (indicating Match filed Form 10-Q regarding Q2.financials on August 8, 2019)
`(emphasis added).
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`additional legal costs in Q4 2019, which, in turn, would impact Match's margin for full-year 2019.
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`Id. ~ 167. The Amended Complaint alleges that when this news was disclosed, Match's share
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`price fell $1.73, or 2.5%, from $68.77 per share on November 5, 2019, to $67.04 per share by the
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`close of trading on November 6, 2019. Id. ~ 168.
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`One month later, on December 2, 2019, Columbia Journalism Investigations published an
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`article purportedly revealing that, with the exception of paid subscribers on Match.com, Match
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`does not generally screen for sexual predators. Id. ~ 169. The article also indicated an admission
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`by an unidentified Match spokesperson that there "are definitely registered sex offenders on
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`[Match's] free products" and noted, through interviews of former Match employees, that Match
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`was ill-equipped to handle users' complaints of sexual assault or rape. Id.~~ 169-70. After this
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`article was published, Match's share price dropped $2.06, or approximately 3%, from $70.48 on
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`November 29, 2019, to $68.42 by the close of the next trading day, December 2, 2019. Id.~ 171.
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`Finally, on January 31, 2020, the House Committee on Oversight and Reform's
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`Subcommittee