Care.com Investors Sue Over Screening Inadequacy, Stock Drop (1)

Care.com Inc. misled investors about the adequacy of its caregiver screening practices, an April 3 suit said.

The caregiver matching platform told investors it proactively screened out providers with criminal backgrounds, but many of those listed on the site actually had police records, the complaint filed in the U.S. District Court for the District of Massachusetts said.

Some caregivers were even accused of committing crimes while working for Care.com customers, the suit said. The company’s site also listed numerous daycare centers as “state-licensed” when they actually weren’t, the complaint said.

Care.com’s share price fell almost 13 percent when investors learned ...