A class action lawsuit was filed against Visa, Inc. (V) by Levi & Korsinsky on November 20, 2024. The plaintiffs (shareholders) alleged that they bought Visa stock at artificially inflated prices between November 16, 2023, and September 23, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Visa stock during that period can click here to learn about joining the lawsuit.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
Visa is one of the world’s largest payment processing companies. The company processes billions of dollars worth of transactions daily, enabling smooth and intermittent flow of payments between consumers, merchants, financial institutions, and government entities.
The company’s false claims about complying with federal antitrust laws are at the heart of the current complaint.
Visa’s Misleading Claims
According to the lawsuit, Visa and three of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the company’s compliance with federal antitrust laws and ancillary issues from SEC filings and related material.
For instance, in the annual report for Fiscal 2023, Visa noted that it regularly checked and adjusted its compliance policies to adhere to the various federal laws relating to anti-money laundering, anti-corruption, competition, and so on. Moreover, the company added that it was involved in several civil and antitrust litigations from the government and other regulatory bodies. These actions are “inherently uncertain, expensive and disruptive to our operations,” Visa added.
Finally, in the quarterly reports related to Q1, Q2, and Q3 of Fiscal 2024, Visa mentioned that for any further information related to the company’s risk, investors must read the information under the heading “Risk Factors” of the annual report for Fiscal 2023.
However, subsequent events (discussed below) reveal that Visa failed to properly comply with the federal antitrust laws.
Plaintiffs’ Arguments
The plaintiffs maintain that the Defendants deceived investors by lying and withholding critical information about the company’s business during the Class Period. Importantly, the Defendants are accused of misleading investors about the ongoing antitrust probe and Visa’s failure to comply with federal laws.
The information became clear on September 23, 2024, after the market closed. Investors were shocked on news reports stating that the DOJ (Department of Justice) had planned to file a suit against Visa for violating antitrust norms.
Unfortunately, the reports were true because the DOJ immediately filed a lawsuit against Visa the next morning. The suit alleged four separate violations of the Sherman Antitrust Act. Importantly, the lawsuit alleged Visa of leveraging its monopolistic position on both sides of the payment processing market, thus, eliminating smaller rivals and competition to maintain its dominating market share. Following the news, Visa stock declined by 5.5%.
To conclude, the defendants allegedly misled investors about Visa’s compliance policies and the possible anti-monopolistic investigations. Despite these unfavorable developments, V stock has gained 19.1% In the past year.
