NEW YORK, Feb. 20, 2025 (GLOBE NEWSWIRE) -- Abraham, Fruchter & Twersky, LLP (www.aftlaw.com), a nationally recognized securities fraud class action law firm announces that purchasers of Block, Inc. (NYSE: XYZ) Class A common stock between February 26, 2020 and April 30, 2024, inclusive (the “Class Period”), have until March 18, 2025 to seek appointment as lead plaintiff of the Block securities fraud class action captioned Gonsalves v. Block, Inc., No. 25-00642 (N.D. Cal.).
CASE ALLEGATIONS: Block owns Square, a financial services platform for small and medium-sized businesses and Cash App (f/k/a “Square Cash”), a mobile payment service that allows users to transfer money using a mobile phone.
The Block class action alleges that defendants made false and/or misleading statements and/or failed to disclose that: (i) Block had engaged in widespread and years-long compliance lapses at Square and Cash App, including by failing to conduct basic due diligence regarding its customers’ identities or the nature of customer transactions so as to prevent the platforms from being used for illegal or illicit activities; (ii) Block had effectively created a haven for widespread illegal and illicit activities on its Square and Cash App platforms by imposing minimal obligations on customers seeking to open accounts, transact, and/or deposit or withdraw funds; encouraging the use of bitcoin; and pressuring Block’s banking partners to forgo ordinary know your customer due diligence activities; (iii) thousands of transactions on Square and Cash App were made in connection with a wide variety of illegal and illicit activities, including, inter alia, money laundering, child sexual abuse, sex trafficking, drug trafficking, terrorism financing, contract killings, and illicit payments to entities and persons subject to economic sanctions; (iv) Block allowed its customers to withdraw funds even after the accounts had been flagged for potentially illegal or illicit activities; (v) Block customers could open up multiple accounts using fake identities in order to engage in illegal or illicit activities; (vi) Block’s senior leadership and the Board of Directors had failed to correct identified compliance deficiencies despite numerous red flags, internal employee reports of deficiencies, and customer complaints; (vii) Block’s Cash App user metrics had been artificially inflated through the use of fake accounts and the ability of criminals and other bad actors to open multiple accounts; and (viii) as a result of the above, Block was subject to a material, undisclosed risk of its conduct being exposed, thereby exposing Block to reputational harm, adverse regulatory actions, the loss of business activity, and adverse impacts to Block’s operations and financial results.
On March 23, 2023, Hindenburg Research published a damaging exposé on Block titled: “Block: How Inflated User Metrics and ‘Frictionless’ Fraud Facilitation Enabled Insiders To Cash Out Over $1 Billion.” On August 3, 2023, Block disclosed that the U.S. Securities and Exchange Commission and the U.S. Department of Justice were investigating the allegations against Block and its employees contained in the Hindenburg Research report. On February 16, 2024, NBC News reported that federal regulators were probing allegations by two whistleblowers that Cash App performed inadequate due diligence on its users – including “‘no effective procedure to establish the[ir] identity.’” Finally, on May 1, 2024, NBC News reported that federal prosecutors were investigating Block for failing to conduct basic due diligence on its customers, and processing thousands of transactions involving countries subject to economic sanctions and multiple cryptocurrency transactions for terrorist groups.
LEAD PLAINTIFF DEADLINE: Lead plaintiff motions for the Block class action must be filed with the court no later than March 18, 2025. If you suffered substantial losses by investing in Block securities and would like to discuss serving as lead plaintiff of the Block class action lawsuit, please contact Jack Fruchter by email at block@aftlaw.com. You can also reach Jack Fruchter by telephone at (212) 279-5050. There is no cost or obligation to you.
Abraham, Fruchter & Twersky, LLP (www.aftlaw.com), is a law firm based in New York with an office in California that has extensive experience in litigating securities law violations on behalf of investors.
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