Netflix Slammed With Class-Action Suit by ‘Misled’ Investors

A group of investors has filed a class-auction lawsuit against Netflix and several of its executives, alleging that the film and TV subscription service purposely misled the plantiffs about its earnings prospects ahead before the company’s stock took a deep dive in the second half of 2011. The lawsuit was filed in the U.S. District Court of Northern California by the City of Royal Oak Retirement System on behalf of all those who purchased stock between Dec. 20, 2010 and Oct. 24, 2011. In addition to Netflix, Chairman and CEO Reed Hastings, CMO David Wells, Chief Content Officer Ted Sarandos, Chief Product Officer Neil Hunt and CMO Leslie Kilgore were named in the complaint. The plantiff claims that Netflix issued “materially false and misleading statements regarding the company’s business practices and its contracts with content providers” and “concealed negative trends in Netflix’s business.” Those actions caused the stock to trade at ̶...