SAN DIEGO, March 15, 2024 (GLOBE NEWSWIRE) -- Johnson Fistel, LLP is investigating potential claims on behalf of Chegg, Inc. (NYSE: CHGG) against certain of its officers and directors to hold them responsible for damages they allegedly caused the company to suffer.
If you have continuously owned Chegg, Inc. shares since before May 5, 2020, you have certain legal rights as a shareholder. If you want to learn more, please read below or submit your information at:
https://www.johnsonfistel.com/investigations/chegg
Recently a class action lawsuit was filed against Chegg seeking damages, but only for those who acquired stock between May 5, 2020 to November 1, 2021 (the “Class Period”). If you purchased shares before the Class Period, you will not be able to participate in any recovery obtained in the class action, but you may be able to participate in a separate action seeking to hold the officers and directors who engaged in the alleged wrongdoing responsible for any damage to the company.
According to the complaint, during the class period, defendants represented that Chegg’s online learning platform provided critical “academic support” to students due to, among other reasons, limited school budgets and a lack of school support during the arc of the COVID-10 pandemic. These defendants also allegedly promoted Chegg’s Expert Q&A feature, which allowed subscribers to ask a pool of purported expert for solutions to homework questions. The complaint further alleges that, when investor questions arose about whether Chegg’s growth was due to students opportunistically using Chegg to cheat during a transitory period of distance learning, the defendants reassured investors that Chegg’s success was predicated on a number of legitimate business bases and that Chegg took efforts to prevent cheating. On November 1, 2021, shortly after the majority of college students returned to campus to attend classes, the Company reported a 10% decline in subscribers. On this news, Chegg’s stock price declined nearly 50%, from $62.76 per share on November 1, 2021, to $32.12 per share on November 2, 2021.
On March 4, 2024, U.S. District Judge P. Casey Pitts denied the defendants’ motion to dismiss the class action, finding, among other holdings, that extensive communications between Chegg and university officials about cheating on the platform, combined with testimony from former employees, met the pleading standard required for Section 10(b) of the Exchange Act and SEC Rule 10b-5.
If you would like to know more about your rights as a shareholder or how you can participate in holding the officers and directors responsible for the damage that they allegedly caused the company to suffer, please contact Johnson Fistel at 619.230.0063.
About Johnson Fistel, LLP:
Johnson Fistel, LLP is a nationally recognized shareholder rights law firm with offices in California, New York, Georgia, and Colorado. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits. For more information about the firm and its attorneys, please visit http://www.johnsonfistel.com.
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