SHAREHOLDER ALERT: Schubert Firm Investigating Possible Breaches of Fiduciary Duty by TrueCar, Inc. (TRUE) Officers and Directors
SAN FRANCISCO, Sept. 9, 2019 /PRNewswire/ -- Schubert Jonckheer & Kolbe LLP is investigating potential derivative claims on behalf of the shareholders of TrueCar, Inc. (NASDAQ: TRUE), related to the company's statements regarding key affiliate USAA's website redesign in June 2017.
TrueCar, which purports to provide prospective buyers with the "true" market price for new and used cars, relies on affinity group marketing partners for website traffic. These partnerships are critical to TrueCar's unit sales growth and financial performance. Historically, TrueCar's most important affinity partner has been the United States Automobile Association ("USAA"), which has generated nearly one-third of the company's annual unit sales and revenues. As part of its close partnership with USAA, TrueCar maintained and operated a co-branded car buying website with USAA. However, when USAA decided to redesign the website in 2017 to de-emphasize car purchasing and gather information about personal finances, TrueCar lost substantial website traffic, ultimately hurting TrueCar's bottom line.
A securities class action was filed against the company on March 30, 2018 (Case No. 2:18-cv-02612-SVW-AGR). According to the class action complaint, from approximately February 2017 until November 2017, TrueCar misleadingly assured investors that USAA's ability to change the co-branding website was merely a "risk," when, in fact, USAA had already decided to implement such changes. As a result of the company's allegedly false and misleading statements (and other alleged wrongdoing, such as the failure to implement, maintain, or follow adequate internal controls), TrueCar stock traded at artificially-inflated levels. Once the truth was finally revealed in a November 2017 earnings report, the company's stock price fell precipitously, dropping more than 35%. The complaint alleges that TrueCar's was not only aware of the USAA website redesign, but certain officers and directors exploited their positions as corporate fiduciaries and sold their personal stock holdings for tens of millions of dollars in insider profits.
Judge Wilson, of the United States District Court for the Central District of California, upheld the class action complaint in February 2019, finding that plaintiff had met the heightened pleadings standards on a motion to dismiss, and "adequately alleged a strong inference of scienter by alleging that Defendants knew about USAA's website redesign and its impact as of January 2017." In August 2019 the company agreed to pay $28.3 million to settle the securities class action. The Schubert Firm is investigating potential derivative claims based on harm the company has suffered as a result of potential breaches of fiduciary duty by the company's officers and directors.
If you currently own stock in TrueCar, Inc. and wish to obtain additional information about derivative claims and your legal rights, please contact Kathryn Schubert via email at [email protected] or by telephone at (415) 788-4220, or fill out the form on our website at www.classactionlawyers.com/true.
About Schubert Jonckheer & Kolbe
Schubert Jonckheer & Kolbe has extensive experience in prosecuting securities claims and has successfully represented investors throughout the nation in shareholder lawsuits. Attorney advertising. Prior results do not guarantee similar outcomes.
SOURCE Schubert Jonckheer & Kolbe LLP
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