Snap Securities Class Action Leads To Government Subpoenas

While an investigation by the SEC or the DOJ often can lead to private securities litigation, sometimes it happens the other way around. In May 2017, Snap, Inc. (the social media company that runs Snapchat), was sued by its investors in a securities class action alleging that its pre-IPO disclosures failed to accurately disclose its reported user growth, including the competitive impact of Instagram. In June 2018, the court denied the motion to dismiss and the case is in discovery.

In November 2018, the U.S. government made a sealed filing in the securities class action. In response to press inquiries about the filing, Snap revealed that it has received subpoenas from the SEC and DOJ (along...