In re CPI Card Group Inc. Securities Litigation

Updated: December 21, 2016
Status: Ongoing Case
On August 29, 2016, Labaton Sucharow was appointed lead counsel in this securities class action against CPI Card Group Inc. (CPI Card) in connection with CPI Card’s initial public offering (IPO) that raised approximately $172.5 million in gross proceeds.

On October 17, 2016, the lead plaintiff filed a consolidated class action complaint alleging that the IPO’s offering materials made material misstatements and omissions in violation of the federal securities laws. In particular, the complaint alleges that CPI Card failed to disclose several negative trends or uncertainties that were known to the company at the time of the IPO. In particular, the complaint alleges that the offering materials omitted the fact that significant increases in the company’s sales leading up to the IPO would soon come to an end because CPI Card’s customers had become massively over inventoried with product during that time period. This, and other known challenges the company’s products were facing at the time of the IPO, resulted in decreased demand for the company’s products as well as increased pricing pressure and competition.

When the action was filed, CPI Card’s stock (PMTS) was trading 53 percent below the IPO price.

The case is In re CPI Card Group Inc. Securities Litigation, No. 16-cv-04531 (S.D.N.Y.). Labaton Sucharow represents lead plaintiff Alex Stewart. The defendants are CPI Card, certain of its officers and directors, its controlling shareholders, and its IPO underwriters.