City of Sunrise General Employees' Retirement Plan v. FleetCor Technologies, Inc. et al

Court: United States District Court Northern District of Georgia
Case Number: 1:17-cv-02207-LMM
Judge: Hon. Leigh Martin May
Class Period: 02/04/2016 - 05/03/2017
Case Contacts: Katherine M. Sinderson, Julia Tebor

This securities class action was filed on behalf of investors who purchased the stock of FleetCor Technologies, Inc. (“FleetCor” or the “Company”) between February 4, 2016 and May 3, 2017 (the "Class Period"), against FleetCor and certain of the Company’s executive officers.  The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b5 promulgated thereunder.

FleetCor is a fuel-card company that offers its products and services to small businesses as well as government and corporate clients.  The Amended Complaint, filed on October 13, 2017, alleges that during the Class Period, Defendants misled investors with regard to: (i) its “sales and marketing” investments; (ii) its “bookings growth” or new business; (iii) the sources of and reasons for FleetCor’s earnings and growth, which FleetCor claimed was due to the conversion of new customers, and the performance of acquired companies, among other things; and (iv) Chevron’s, FleetCor’s main partner whose fuel cards FleetCor administered, departure to FleetCor’s primary competitor, and FleetCor’s purported assistance with that transition.

These statements were materially false and misleading. Among other things, the Company’s ostensible revenue growth was based on its fraudulent overcharging of customer fees, dissemination of misleading marketing materials, and reliance on predatory sales practices.  Moreover, the Company’s sales and marketing tactic was to exploit smaller companies by falsely telling those companies that there were no fees associated with FleetCor cards.  Once those customers became dependent on FleetCor products, FleetCor would add exorbitant and previously undisclosed fees to customer bills. Further, the Company’s “bookings growth” or new business growth was due in large part to the Company’s practice of “flipping” or where the Company would move accounts from one card to another and count it as new business.   

The truth regarding Defendants’ misconduct began to be disclosed in late 2016 when, among other things, third party journalists published investigative reports revealing at least in part FleetCor’s true business practices.  From the first partial disclosure until the end of the Class Period, the stock price declined from $170.00 to $131.26, a drop of 22%.

The Court appointed Sunrise General as Lead Plaintiff and Bernstein Litowitz Berger & Grossmann LLP as Lead Counsel on August 25, 2017.  Plaintiff filed its Amended Complaint on October 13, 2017.   On May 15, 2018, following Defendants’ motion to dismiss the Amended Complaint, the Court issued an order sustaining in large part the Amended Complaint, including claims regarding Defendants’ statements concerning the sources of or reasons for FleetCor’s earnings and growth. If you wish to discuss this action or have any questions concerning your rights or interests, please contact Katherine M. Sinderson or Julia Tebor at 212-554-1400.

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