PayPal Executives, Directors Sued Over Fake-Accounts Scandal

PayPal Holdings Inc. executives and directors breached fiduciary duties to the company by failing to disclose that bot farms were creating many new accounts, opening it to litigation and reputational harm, a shareholder says in a derivative suit.

Alpesh Shah’s complaint, filed Wednesday in the US District Court for the District of Delaware, follows on the heels of an investor class action over the same new-account metrics.

PayPal held out “net new active accounts” as an important performance measure and a key to future growth, Shah says. But it failed to disclose that bot farms “systematically manipulated PayPal’s $10.00 cash ...