Paycom Allegedly Hid Payroll Product’s ‘Cannibalizing’ Effects

Paycom Software Inc. and two top executives allegedly misled investors about the negative impact the introduction of payroll platform Beti had on its margins and the fees the company previously charged to correct common payroll mistakes, a shareholder class action says.

The suit, which is the second class action with similar allegations against the company and its leadership, highlights Paycom’s failure to disclose that it had relied upon those fees to fuel revenue growth, as well as the fact that Beti was “cannibalizing” the fees and decreasing gross profit margins, according to the complaint filed Thursday in US District Court ...