Block Leaders Sued Over Square, Cash App ‘Red Flags’ on Crime

Block Inc. directors and officers made deliberately misleading statements about the company’s due diligence and financial reporting while it was ignoring red flags about criminals’ use of its payment platforms, an investor alleges.

Block “was at heightened risk of regulatory scrutiny and reputational damage,” but its leadership issued statements that failed to disclose those risks, Viraj Patel says in a shareholder derivative suit. He filed his complaint Wednesday in the US District Court for the Northern District of California.

Co-founder Jack Dorsey and 14 other current and former Block directors and executives are responsible for the ensuing investigations by regulators ...