California District Court Dismisses Securities Class Action After Plaintiffs Failed to Plead that PayPal Knew Magnitude of Security Breach
January 4, 2019
On December 13, 2018, the District Court for the Northern District of California dismissed a putative securities class action brought against PayPal Holdings, its subsidiary TIO Networks Corp., and several executives of both companies for a security breach that resulted in the potential compromise of personally identifiable information for 1.6 million customers.
In Sgarlata v. PayPal Holdings Inc., No. 17-cv-06956-EMC, 2018 WL 6592771 (N.D. Cal. Dec. 13, 2018), the court dismissed the complaint for failure to plead scienter because plaintiffs failed to adequately plead that defendants knew not only of an actual security breach, but also the magnitude of the breach and the type of data accessed.
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