Settled:October 28, 2016
On October 28, 2016, the court granted final approval of a $9.5 million settlement with Castlight Inc, in a case alleging that the company's IPO offering documents were false and misleading because they omitted material information, including significant obstacles and delays faced by customers during the implementation of Castlight’s technology, resulting in low customer renewal rates and negatively impacting the company’s gross margins. Additionally, Castlight had to pay offsetting fees to appease disappointed customers due to the delayed and botched implementations. The company also concealed the fact that it had hired third-party vendors to perform implementations, significantly increasing its “sales” expenses and misrepresenting to investors that it used its own personnel.
The truth was partially disclosed on July 29, 2014 when Castlight announced results for the 2Q’14, revealing tepid customer additions and “static” pricing. The company also disclosed that two members of its board of directors, including one member of the audit committee, had resigned effective immediately, and that the company’s COO would resign effective September 30, 2014. In response to this news, Castlight’s stock price fell 4.73 percent to close at $14.11 per share the following day. On February 18, 2015, Castlight reported weak customer signings for 4Q’14, as well as sharply disappointing guidance for 1Q and full year of 2015. In reaction to these disclosures, Castlight’s stock price declined $2.92 per share, or 30.87 percent the very next day.
On July 2, 2015, the Firm filed a consolidated complaint in the Superior Court of California (San Mateo) against Castlight Health Inc. (Castlight), a software-as-a-service provider that offers a subscription-based online service intended to allow large employers to reduce medical benefit costs. The company held its initial public offering (IPO) on March 13, 2014, garnering more than $200 million for the company in gross proceeds.
The case is In re Castlight Health, Inc. Shareholder Litigation, No. CIV533203 (Cal. Super. Ct. San Mateo). The plaintiff is Oklahoma Firefighters Pension and Retirement System. The defendant is Castlight Health, Inc.
Submit Proof of Claim
If you purchased Castlight Class B common stock pursuant or traceable to the Registration Statement issued in connection with the company’s March 14, 2014 IPO through September 10, 2014 (the class period), you may be entitled to receive money from the proposed settlement.
To be eligible for a payment, you must submit a Proof of Claim form by November 1, 2016 in accordance with the instructions set forth in the Notice.
A Settlement Hearing was held on October 28, 2016 at 9:00 a.m. before the Hon. Marie S. Weiner at the Superior Court of California, County of San Mateo, Dept. 2, Courtroom 2E, 400 County Center, Redwood City, CA 94063. The court approved the settlement and related relief in full.
If you have questions about the settlement, please contact Labaton Sucharow at email@example.com or 1-888-219-6877, or contact the Claims Administrator, Girlardi & Co., at 1-844-848-1253.