Freshworks IPO Statements for Investors Said to Be Too Sunny (2)

Freshworks Inc. and the underwriters of its initial public offering are responsible for inaccurate statements that inflated its stock price, an investor alleged in a proposed class action.

Morgan Stanley & Co., J.P. Morgan Securities LLC, BofA Securities Inc., are among those named as underwriting defendants in the suit, filed Tuesday in the US District Court for the Northern District of California.

The overly optimistic statements preceded disappointing results and caused a 70% skid in the price of Freshworks stock, investor Mohan R. Sundaram said in his complaint. Freshwork sells a customer communications platform for small and mid-sized businesses.

Freshworks ...