Zeta Global Holdings Corp. (ZETA) Investigation

The investigation focuses on the propriety of Zeta’s disclosures concerning its business practices, including revenue recognition and sources of growth.

The company’s disclosures may have come into question on November 13, 2024 coincident with Culper’s report, which Culper said was based in part on conversations with multiple former Zeta employees. Culper alleges that there are two reasons that “undermine the integrity of the Company’s data collection and reported financials.”

First, Culper concluded, “we believe that Zeta has formed ‘two-way’ contracts with third party consent farms wherein the Company simultaneously acts as both a supplier and buyer of consumer data, not only allowing the Company to flatter reported revenue growth, but raising round tripping concerns.” (Zeta’s February 28, 2024 annual report contains the outside auditor’s identification of- without providing an opinion on- revenue recognition related to “contracts with third parties in which the Company is acting as both a vendor and customer as a critical audit matter because of the judgments necessary for management to evaluate whether goods or services are distinct and to estimate the fair value of the goods or services provided or received.”)

Second, Culper concluded, “we believe that Zeta has quietly spun up its own network of consent farms i.e., sham websites that hoodwink millions of consumers each month into handing their data over to Zeta under false pretenses, baited by job applications, stimulus money, or other rewards that simply do not exist[]” and “[w]e believe that these consent farms have driven almost the entirety of Zeta’s growth over the last 2+ years and now represent 56% of reported Adj. EBITDA.”

In response, the price of Zeta shares crashed $10.46, or 37% lower, on November 13, 2024.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the ZETA investigation about?

We are focused on whether Zeta may have misled investors about its business practices and prospects.

WHAT SHOULD I DO?

I worked at ZETA. What should I do?

If you were an employee of ZETA, 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 ZETA, 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 ZETA 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.