Cerence Investors Advance Suit Over Automaker Contracts, Growth

Cerence Inc. investors adequately alleged that three statements by a former executive at the automotive software company were part of a fraudulent scheme to boost share prices, a federal court ruled.

The proposed class action focuses on prepaid, discounted software license agreements with automakers, which allegedly detract from future revenue. The falsity of the three statements at issue, suggesting these prepaid or “fixed” agreements were atypical and in decline, is a close call, Judge Allison D. Burroughs said Monday for the US District Court of Massachusetts.

But the investors may proceed with those allegations, she said.

The company, which makes ...