Block, Inc. (NYSE: SQ; XYZ)

This lawsuit is for anyone who acquired securities in Block, Inc. (NYSE: SQ; XYZ) from February 26, 2020 through April 30, 2024.

The lawsuit alleges that the Company and certain of its executives violated federal law. Specifically, the lawsuit alleges that, throughout the time period mentioned above, the Company misled investors regarding its financial condition. More specifically, the lawsuit alleges that the Company misled investors by telling investors that the Company complied with all applicable laws but then by failing to regulate customers on its apps, Square and Cash App, thereby allowing customers to use the apps in the furtherance of a variety of crimes, thereby subjecting the Company to loss of business reputation, lawsuits, and regulatory scrutiny.

On March 23, 2023, Hindenburg Research published a report alleging that “Block has systematically taken advantage of the demographics it claims to be helping” and that the Company has demonstrated a “willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics.” The report also alleged that Block “has wildly overstated its genuine user counts and has understated its customer acquisition costs” and that Block’s approach to compliance “made it easy for bad actors to mass-create accounts for identity fraud and other scams, then extract stolen funds quickly.” On this news, the price of the Company’s stock dropped precipitously on unusually heavy trading volume. Then, on August 3, 2023, Block disclosed that the SEC and the U.S. Department of Justice were investigating the allegations made in the Hindenburg Report. On this news, the price of the Company’s stock again dropped precipitously on unusually heavy trading volume. Then, 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’” – opening the door to potential money laundering, terrorism financing, and other illegal and illicit activities. On this news, the price of the Company’s stock again dropped precipitously on unusually heavy trading volume. Finally, on May 1, 2024, NBC News reported that federal prosecutors were investigating Block due to allegations by a former employee that Block 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 Block 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. On this news, the price of the Company’s stock again dropped precipitously on unusually heavy trading volume.

The Law Offices of Howard G. Smith seeks to recover damages on behalf of class members. If you acquired securities in Block, Inc. (NYSE: SQ; XYZ) from February 26, 2020 through April 30, 2024 you may join the lawsuit by submitting your information online, or you may call the Law Offices of Howard G. Smith and speak to Mr. Smith directly to learn how he can protect your rights.