NEW YORK, Oct. 29, 2018 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Chegg, Inc. ("Chegg" or the "Company") (NYSE: CHGG) of the November 26, 2018 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in Chegg stock or options between July 30, 2018 and September 25, 2018 and would like to discuss your legal rights, click here: www.faruqilaw.com/CHGG. There is no cost or obligation to you.
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The lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of all those who purchased Chegg securities between July 30, 2018 and September 25, 2018 (the "Class Period"). The case, Shah v. Chegg, Inc. et al, No. 18-cv-05956 was filed on September 27, 2018 and has been assigned to Judge Charles R. Breyer.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by failing to disclose to investors: (1) that the Company lacked adequate security measures to protect users' data; (2) that the Company lacked the internal controls and procedures to detect unauthorized access to its systems and to its data; (3) that, as a result, the Company would incur additional expenses and litigation risks; and (4) that, as a result of the foregoing, the company's positive statements about the Company's business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.
Specifically, on September 25, 2018, the Company filed a Form 8-K with the SEC, stating in relevant part that "on September 19, 2018, Chegg learned that on or around April 29, 2018, an unauthorized party gained access to a Company database that hosts user data for chegg.com and certain of the Company's family of brands such as EasyBib." The Form 8-K also stated that "the information that may have been obtained could include a Chegg user's name, email address, shipping address, Chegg username, and hashed Chegg password" and that the "Company expects to start notifying approximately 40 million active and inactive registered users and certain regulatory authorities on September 26, 2018."
After the announcement, Chegg's share price fell from $32.33 per share on September 25, 2018 to a closing price of $28.42 on September 26, 2018—a $3.91 or a 12.09% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Chegg's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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