Root, Inc. Securities Fraud Class Action

Case Background:

On October 5, 2020, Root filed a registration statement on a Form S-1 with the Securities and Exchange Commission (“SEC”) in connection with the IPO, which, after several amendments, was declared effective on October 27, 2020 (the “Registration Statement”).  On October 28, 2020, Root conducted the IPO, selling 26.8 million shares of its Class A common stock to the public at $27.00 per share for total approximate proceeds of $724.43 million. On October 29, 2020, Root filed a prospectus on a Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the Registration Statement (the “Prospectus” and, together with the Registration Statement, the “Offering Documents”).  Throughout the Class Period, the defendants misrepresented Root’s cash flow needs and auto-insurance business prospects.

The complaint alleges that the Offering Documents and the defendants made false and/or misleading statements and/or failed to disclose that: (1) Root would foreseeably fail to generate positive cash flow for at least several years following the IPO; (2) accordingly, Root would foreseeably require significant cash infusions to meet its cash flow needs; (3) notwithstanding the defendants’ touting of Root’s purportedly unique, data-driven advantages, several of Root’s established industry peers in fact possessed significant competitive advantages over Root with respect to, inter alia, telematics data and data engagement; and (4) as a result, the Offering Documents and the Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.

Current Status of Case:

On April 29, 2024, the Appellate Court entered an Order affirming District Court’s Judgment. This action has concluded. 

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jon Naji, Esq. (484) 270-1453; or via e-mail at [email protected]. If you would like additional information about the suit, please click on the link “Submit Your Information” above and fill out the form as promptly as possible.