Buckeye Reporter

Attorney General Dave Yost has filed a motion seeking lead-plaintiff status in a securities class-action lawsuit against Block Inc., the owner of Cash App and Square. The lawsuit alleges that Block misled investors, resulting in $12.6 million in losses for Ohio's largest public pension fund and billions more for other investors.

Yost's motion requests that the Ohio Public Employees Retirement System be appointed as the lead plaintiff. The case claims that Block failed to inform investors about significant compliance issues, which allegedly allowed illegal activities on its platforms.

"Block claimed its products were fortified against crime, but in reality, the front door was left wide-open to drug traffickers, money launderers and worse," Yost stated. "The false narrative cost investors billions of dollars, and the company needs to make it right."

The lawsuit was filed in the U.S. District Court for the Northern District of California and seeks damages from Block, headquartered in Oakland, California. Defendants include Block executives Jack Dorsey and Amrita Ahuja.

According to the lawsuit, Block's oversight failures facilitated numerous illegal transactions such as money laundering, child sex abuse, drug trafficking, terrorism financing, contract murder, and sanctions evasion.

In early 2023, disclosures highlighted compliance lapses at Block leading to illegal activities on its platforms. Following these revelations, an investment research firm's report caused a nearly 15% drop in Block's share price in March 2023. Shares fell another 14% after investigations by the U.S. Securities and Exchange Commission and Department of Justice were announced in August 2023. Further allegations reported by news outlets in May 2024 led to an additional 8% decline in share prices. Overall, Block's share value decreased by 77% over four years covered by the lawsuit.

In January this year, regulators imposed $255 million in penalties on Block, including up to $120 million in consumer refunds.