Yelp Loses Bid to Toss Shareholder Derivative Suit Over Ads

Dec. 1, 2020, 6:09 PM

Yelp Inc. must face a shareholder derivative suit accusing its leadership of misleading investors about advertiser churn after a federal judge in California rejected the company’s motion to dismiss the case.

The online review platform’s investor has adequately alleged that Yelp’s decision to defer an investigation acts as a rejection of the pre-suit demand and isn’t entitled to deference, the U.S. District Court for the Northern District of California said.

The shareholder made a required pre-suit demand on Yelp’s board, and the board “deferred making a final decision” until after the conclusion of a related securities class suit rather ...

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