Shareholder Class Action Alleging TrueCar, Inc. (TRUE) Made Materially False and Misleading Statements Survives Motion to Dismiss
Investors filed a class action complaint against TrueCar, Inc. (TRUE) for alleged violations of the Securities Exchange Act of 1934. According to the complaint, TrueCar’s largest source of revenue comes from the United Services Automobile Association (“USAA”). The complaint alleges that TrueCar made positive statements about its prospects and growth while failing to disclose negative developments related to USAA’s changes to the website maintained by TrueCar, which had a negative effect on the volume of purchases generated by USAA. On this news, TrueCar’s shares fell over 35%, and currently trade even lower at $9.76 per share. On February 5, 2019, U.S. District Court Judge Stephen V. Wilson denied defendant’s motion to dismiss plaintiff’s complaint, paving the way for litigation to proceed.