Block, Inc. (XYZ) Securities Class Action

Investors in Block, Inc. (NYSE: SQ) n/k/a (NYSE: XYZ) began to learn of potentially adverse information about the company and its Square and Cash App platforms on Mar. 23, 2023, when Hindenburg Research published a scathing report on the company.

After a 2-year investigation, which included dozens of interviews with former employees, partners, and industry experts, Hindenburg concluded, in part, that Block had “wildly overstated its genuine user counts” and “[c]ore to the issue is that Block has embraced one traditionally ‘underbanked’ segment of the population: criminals.”

On February 4, 2024, NBC News reported that federal regulators were probing allegations of 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.

Then, on May 1, 2024, NBC News reported that federal prosecutors were investigating Block due to allegations by a former employee that the Company 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 Company 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.

Most recently, on Jan. 15, 2025, The Wall Street Journal reported that Block agreed to pay $80 million to dozens of state regulators over alleged problems with its program to counter money-laundering. Then, on Jan. 16, 2025, the Consumer Financial Protection Bureau (“CFPB”) ordered Block to pay $175 million and fix its failures on Cash App user fraud. The CFPB said Cash App attempted to avoid investigative obligations by tricking its users and that Cash App was vulnerable to criminals defrauding users.

Further related regulatory actions is possible. Block stated in its most recent Form 10-Q quarterly report filed in November, that it “also received inquiries from the SEC and Department of Justice (“DOJ”) shortly after the publication of a short seller report in March 2023. In July 2024, the Company received a follow-on inquiry from the SEC. The Company believes these inquiries primarily relate to the allegations raised in the short seller report, the Company’s compliance and risk practices, and related disclosures. The Company continues to cooperate with both agencies. The Company is unable to predict the likely outcome of these matters and cannot provide any assurance that the SEC or DOJ will not ultimately take legal action against the Company or that the outcome of any such action, if brought, will not have a material adverse effect on the Company.”

These developments have driven the price of Block shares significantly lower.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the XYZ investigation about?

We are investigating whether Block may have intentionally misled investors about its compliance and other business practices

WHAT SHOULD I DO?

I worked at XYZ. What should I do?

If you were an employee of XYZ, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in XYZ, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any XYZ investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.