On November 20, 2024, a new complaint was filed against Visa Inc. by shareholder (plaintiff) Beibei Cai. (V) in the United States District Court for the Northern District of California. The defendants in the complaint are the company, CEO Ryan McInerney, CFO Chris Suh and Peter Andreski, Global Corporate Controller and Chief Accounting Officer.
The plaintiff alleges that it purchased Visa shares at artificially inflated prices between November 16, 2023 and September 23, 2024, inclusive (the “Class Period”). The claimant is now seeking compensation for her financial losses. If you would like to know more about the lawsuit, click here.
Visa is one of the leading players in digital payments. It facilitates transactions between consumers, merchants, financial institutions and government agencies.
The filed complaint alleges that Defendants deceived Visa investors during the Class Period in violation of Sections 10(b) and 20(a) of the Securities Exchange Act.
According to the complaint, Visa intentionally misrepresented financial statements submitted to the US SEC (Securities and Exchange Commission). In particular, the plaintiff alleges that Suh and Andreski failed to properly monitor and audit Visa’s financial statements.
The complaint accuses Visa of downplaying the risk that the company could be the target of an antitrust investigation by the U.S. Department of Justice (DOJ). For example, in its annual report filed with the SEC on November 15, 2023, Visa stated that it was in compliance with federal antitrust laws, among other federal regulations.
Additionally, in its 10Q quarterly reports filed in April 2024 and July 2024, the company indicated that it was complying with federal antitrust laws.
However, the plaintiff alleges that, as evidenced by subsequent disclosures, Visa executives knew — or should have known — that the company routinely violated federal antitrust laws.
Contrary to Visa and the other defendants’ claims in the company’s financial statements, they allegedly misled investors about compliance with federal antitrust laws.
The truth came to light on September 23, 2024, when multiple news outlets reported that the DOJ planned to file a lawsuit against Visa for antitrust violations. The next day, the DOJ filed a complaint with the United States of America against Visa Inc., accusing the company of four separate violations of the Sherman Antitrust Act. Specifically, the lawsuit alleges that Visa’s market dominance is due to systematic anticompetitive practices that hinder competition.
Following the news, Visa shares fell more than 5%.
Finally, the defendants are alleged to have misled investors because they lacked effective internal controls and policies to ensure compliance with federal antitrust laws. Despite the ongoing challenges, Visa shares are up 12% this year.
Revelation
