Netflix Shareholders are Suing Netflix

The drop in subscribers isn't sitting well with investors.

The drop in subscribers isn’t sitting well with investors.

Earlier this week, a lawsuit was filed in a federal district court in San Francisco on behalf of shareholders of streaming service Netflix. Surprisingly, the target of this lawsuit is none other than Netflix itself, with the chief complaint being that Netflix under-reported the number of subscribers they have lost recently.

The lawsuit claims that Netflix knowingly committed securities fraud through “materially false and/or misleading statements,” with the filing adding that the company “failed to disclose material adverse facts about the company’s business, operations and prospects.”

The lawsuit continues, claiming that Netflix “employed devices, schemes and artifices to defraud [investors], while in possession of material adverse non-public information”. It also adds that Netflix made “untrue statements of material facts and/or omitting to state material facts necessary in order to make the statements made about Netflix and its business operations and future prospects in light of the circumstances under which they were made not misleading.”

The investors are seeking class-action suits against Netflix for damages including “compensatory damages in favor of Plaintiff and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon.”

Netflix has not commented on the lawsuit at time of writing.

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