Block, Inc. (XYZ) Faces Securities Class Action, Regulators Levy Cash App Fines Following Investigations Going Back to Hindenburg Report– Hagens Berman
SAN FRANCISCO, Jan. 24, 2025 (GLOBE NEWSWIRE) — Investors in Block, Inc. (NYSE: SQ) n/k/a (NYSE: XYZ) began to learn of potentially adverse information about the company and its Square and Cash App platforms on Mar. 23, 2023, when Hindenburg Research published a scathing report on the company.
After a 2-year investigation, which included dozens of interviews with former employees, partners, and industry experts, Hindenburg concluded, in part, that Block had “wildly overstated its genuine user counts” and “[c]ore to the issue is that Block has embraced one traditionally ‘underbanked’ segment of the population: criminals.”
On February 4, 2024, NBC News reported that federal regulators were probing allegations of two Whistleblowers that Cash App performed inadequate due diligence on its users –including “‘no effective procedure to establish the[ir] identity’” – opening the door to potential money laundering, terrorism financing, and other illegal and illicit activities.
Then, on May 1, 2024, NBC News reported that federal prosecutors were investigating Block due to allegations by a former employee that the Company had engaged in widespread and years-long compliance lapses at its two main units, Square and Cash App. Reportedly, the employee had provided prosecutors with internal Company documents demonstrating that Block had failed to conduct basic due diligence on its customers, that Square had processed thousands of transactions involving countries subject to economic sanctions (including Cuba, Iran, Russia, and Venezuela), and that Block had processed multiple cryptocurrency transactions for terrorist groups.
These developments have driven the price of Block shares significantly lower. Hagens Berman urges investors who purchased Block shares and suffered substantial losses to submit your losses now.
Class Period: Feb. 26, 2020 – Apr. 30, 2024
Lead Plaintiff Deadline: Mar. 18, 2025
Visit: www.hbsslaw.com/investor-fraud/xyz
Contact the Firm Now: XYZ@hbsslaw.com
844-916-0895
Most recently, on Jan. 15, 2025, The Wall Street Journal reported that Block agreed to pay $80 million to dozens of state regulators over alleged problems with its program to counter money-laundering. Then, on Jan. 16, 2025, the Consumer Financial Protection Bureau (“CFPB”) ordered Block to pay $175 million and fix its failures on Cash App user fraud. The CFPB said Cash App attempted to avoid investigative obligations by tricking its users and that Cash App was vulnerable to criminals defrauding users.
Further related regulatory actions is possible. Block stated in its most recent Form 10-Q quarterly report filed in November, that it “also received inquiries from the SEC and Department of Justice (“DOJ”) shortly after the publication of a short seller report in March 2023. In July 2024, the Company received a follow-on inquiry from the SEC. The Company believes these inquiries primarily relate to the allegations raised in the short seller report, the Company’s compliance and risk practices, and related disclosures. The Company continues to cooperate with both agencies. The Company is unable to predict the likely outcome of these matters and cannot provide any assurance that the SEC or DOJ will not ultimately take legal action against the Company or that the outcome of any such action, if brought, will not have a material adverse effect on the Company.”
Block, Inc. (XYZ) Securities Class Action:
“We are investigating whether Block may have intentionally misled investors about its compliance and other business practices,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Block and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the Block case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding Block should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email XYZ@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Contact:
Reed Kathrein, 844-916-0895
