One month after Etsy’s IPO, a third party report stated that over 5% of the goods offered for sale on Etsy may infringe on copyright or trademark rights and that the owners of those rights are more aggressively enforcing them. This case alleges that Etsy should have made more disclaimers about this potential problem during the IPO process.
What investors are part of this class action? The class period is currently defined as all persons who purchased Etsy common stock between April 16, 2015 and May 10, 2015, inclusive (the “Class Period”). Etsy common stock trades under the symbol “ETSY”.
Procedural Status. The lawsuit was filed on May 13, 2015 and is captioned Altayyar v. Etsy, Inc. et al. It was filed in the New York Eastern District Court. Its civil docket number is 1:15cv02785. The lead plaintiff deadline is July 13, 2015.
Etsy, Inc. operates online and offline marketplaces to buy and sell handmade items, vintage goods, and craft supplies. Its platform connects sellers and buyers to sell or buy products for art, home and living, mobile accessories, jewelry, wedding, and other products.
The complaint alleges that Easy made materially false and misleading statements regarding its business, operational and compliance policies, including:
more than 5% of all merchandise for sale on Etsy’s website may be either counterfeit or constitute trademark or copyright infringement;
brands are increasingly pursuing sellers on Etsy for trademark or copyright infringement, jeopardizing the Company’s listing fees and commissions; and
as a result of the foregoing, Etsy’s public statements were materially false and misleading.
Current Case Status:
This case is in the notice period. When a shareholder brings suit under certain federal securities law, generally that shareholder must give notice via a press release. This notice starts a 60 day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well. At the end of this 60 day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation. We will review the docket again in June and update this page as warranted.