SITO Mobile Survives Motion to Dismiss
Shareholder Class Action Alleging Defendants Made Materially False and Misleading Statements Survives Motion to Dismiss
Investors filed a class action complaint against SITO Mobile, Ltd. for alleged violations of the Securities Exchange Act of 1934. According to the complaint, SITO made misleading statements regarding the 2016 presidential election and the negative impact that it had on the company’s sales and revenues. Further, SITO officials misappropriated funds from the company through illicit expense reimbursement requests and credit card charges, while at the same time promoting the company’s success and seeking to raise funds from the uninformed public. When SITO revealed to investors that the company’s revenue had suffered due to restrained advertising spending, SITO’s market capitalization declined by approximately $40 million. On January 30, 2019, U.S. District Court Judge Esther Salas denied in part defendant’s motion to dismiss plaintiff’s complaint, paving the way for litigation to proceed.
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