Fitbit named in securities class action

Posted on: January 12th, 2016 by Steve Larson

Just days after being sued in a class action by consumers relating to alleged defective heart rate monitoring results, Fitbit, Inc. was hit with a proposed shareholder class action lawsuit in California federal court that claims the fitness tracking device company lied in statements issued in connection with its initial public offering and afterwards about the reliability of its heart rate monitoring technology.

The complaint says that after the news of the consumer class action broke, Fitbit stock fell $1.40, or 5.8 percent, to close at $22.90 on Jan. 6. The securities suit also names Fitbit President, Chairman and CEO James Park and Chief Financial Officer William R. Zerella.

San Francisco-based Fitbit completed its IPO on June 18, issuing 36,575,000 shares and raising net proceeds of about $732 million, according to the securities complaint. In statements issued in connection with the IPO and subsequently, the complaint says, Fitbit spoke about how its devices use technologies and algorithms that “more accurately measure and analyze user health and fitness metrics.” These public statements were materially false and misleading, the complaint alleges.

The case is Robb v. Fitbit Inc. et al., case number 3:16-cv-00151, in the U.S. District Court for the Northern District of California.