Defendant's Attorney: Melanie M. Blunschi

Description: Philadelphia, Pennsylvania civil litigation lawyers represented the Plaintiff who sued the Defendants on Securities Exchange Act violation theories.

Shift4 Payments, Inc. (“Shift4”) is a company which provides software and payment processing solutions. Shift4's corporate leaders include Defendants Jared Isaacman (Chief Executive Officer), Nancy Disman (Chief Financial Officer since August 5, 2022), and Bradley Herring (Chief Financial Officer prior to August 5, In the third quarter of 2022, Shift4 completed its “mass strategic buyout program.” O'Meara Compl. ¶ 3, Baer Compl. ¶ 3. The program was an effort to insource its sales distribution network. O'Meara Compl. ¶ 3, Baer Compl. ¶ 3. However, O'Meara and Baer allege that, in the wake of the program, a series of accounting maneuvers presented an inaccurate picture of Shift4's financial performance. O'Meara Compl. ¶ 54, Baer Compl. ¶ 60.

This came to light on October 21, 2022, when Shift4 filed a report with the SEC disclosing that a number of its prior financial statements could no longer be relied upon because of a material weakness in its financial controls. O'Meara Compl. ¶ 43, Baer Compl. ¶ 61. Specifically, the issue arose out of treating customer acquisition costs as cash used in investing activities as opposed to operating activities. O'Meara Compl. ¶ 43, Baer Compl. ¶ 61. The revised statements presented a significant decrease in net cash provided by operating activities. O'Meara Compl. ¶ 43, Baer Compl. ¶ 61. As a result, Shift4's stock price fell 2.67%. O'Meara Compl. ¶ 44, Baer Compl. ¶ 62.

Additionally, Shift4 is not a “member bank” and is thus “not eligible for primary membership in certain payment networks.” O'Meara Compl. ¶ 25, Baer Compl. ¶ 28. To gain access to them, Shift4 utilizes a sponsor bank. O'Meara Compl. ¶ 25, Baer Compl. ¶ 28. The sponsor bank agreement requires that Shift4 deposit significant funds with the sponsor bank to cover overdraft obligations. O'Meara Compl. ¶ 25, Baer Compl. ¶ 28. Sometime before the fourth quarter of 2022 ended, Shift4 withdrew the entire deposit while claiming the maneuver was part of negotiations for lower collateral requirements. O'Meara Compl. ¶ 59, Baer Compl. ¶ 79. However, Shift4 reported the withdrawal as an addition to its operating cash flow. O'Meara Compl. ¶ 59, Baer Compl. ¶ 79. On April 19, 2023, Blue Orca Capital issued a report, in part, detailing this maneuver. O'Meara Compl. ¶ 55, Baer Compl. ¶ 75. On this news, Shift4's stock price fell 8.68%. O'Meara Compl. ¶ 60, Baer Compl. ¶ 80.

On August 18, 2023, Alfred O'Meara filed the instant Complaint, docketed at 5:23-cv-3206, bringing a securities class action on behalf of those who purchased Shift4 securities between November 10, 2021, and April 18, 2023. On October 13, 2023, Robert Baer filed the instant Complaint, subject to consolidation, which is docketed at 5:23-cv-3969 and brings a securities class action on behalf of those who purchased Shift4 securities between June 5, 2020, and April 18, 2023.

Presently before the Court is Robert Baer's Motion for Consolidation, Appointment as Lead Plaintiff, and Approval of Selection of Co-Lead Counsel. See Mot., ECF. No. 14. In that Motion, Baer seeks: 1) to consolidate the above captioned actions; 2) appointment as lead plaintiff on behalf of a class consisting of persons and entities who purchased Shift4 securities between June 5, 2020, and April 18, 2023; and 3) approval of Pomerantz LLP and The Schall Firm as Co-Lead Counsel for the Class. For the reasons that follow the Motion is granted in its entirety.

Outcome: The Court finds that consolidation is appropriate and in the interest of judicial economy because the Related Actions concern common question of law and fact. Consistent with the standards set forth in the PSLRA, the Court also finds that Baer should be appointed lead plaintiff in the instant matter. Finally, for the reasons outlined supra, the Court approves of Baer's choice of co-lead counsel.

Plaintiff's Experts:

Defendant's Experts:

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