Match Group, Inc. (MTCH) Accused of Deceptive Business Practices
According to the complaint for alleged violations of the Securities Exchange Act of 1934, in August 2019, Match Group, Inc. (MTCH) touted an increase in subscribers in its second quarter 2019 financial results and reaffirmed these results in subsequent press releases. In reference to its potential risk factors, Match Group acknowledged that its “ability to attract and retain users through cost-effective marketing efforts” was necessary for the Company to remain profitable. However, Match Group failed to disclose that some of its marketing practices relied on deceiving its consumers through the use of artificial love interest ads to promote buying or upgrading subscriptions. Then, on September 25, 2019, the Federal Trade Commission announced that it was suing Match.com for its deceptive ads as well as its failure to resolve disputed charges and intentionally complicating its subscription cancellation process. Since this news, Match Group’s share price fell 6% to close at $68.26 per share, an almost 26% decline from its class period high of $91.77, and has yet to recover.