NEW YORK, July 5, 2022 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Okta, Inc. ("Okta" or the "Company") (NASDAQ: OKTA) and certain of its officers. The class action, filed in the United States District Court for the Northern District of California, and docketed under 22-cv-02990, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired otherwise Okta securities between March 5, 2021 and March 22, 2022, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired Okta securities during the Class Period, you have until July 19, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Okta provides identity solutions for enterprises, small and medium-sized businesses, universities, non-profits, and government agencies in the United States and internationally. The Company offers a variety of cybersecurity products and services. Following its completed merger with Auth0, Inc., a Delaware corporation ("Auth0"), on May 3, 2021, Okta began providing additional Auth0 products related to cybersecurity and login solutions.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Okta had inadequate cybersecurity controls; (ii) as a result, Okta's systems were vulnerable to data breaches; (iii) Okta ultimately did experience a data breach caused by a hacking group, which potentially affected hundreds of Okta customers; (iv) Okta initially did not disclose and subsequently downplayed the severity of the data breach; (v) all the foregoing, once revealed, was likely to have a material negative impact on Okta's business, financial condition, and reputation; and (vi) as a result, the Company's public statements were materially false and misleading at all relevant times.
On or around March 21, 2022, hackers known as LAPSUS$ posted screenshots on their Telegram, a cloud-based instant-messaging service, channel showing what they claimed was Okta's internal company environment. Thereafter, on March 22, 2022, the Company's Chief Executive Officer, Defendant Todd McKinnon ("McKinnon"), posted a statement on his Twitter account, disclosing that, "[i]n late January 2022, Okta detected an attempt to compromise the account of a third party customer support engineer working for one of our subprocessors" (emphasis added); that "[t]he matter was investigated and contained by the subprocessor"; that "[w]e believe the screenshots shared online are connected to this January event"; and that, "[b]ased on our investigation to date, there is no evidence of ongoing malicious activity beyond the activity detected in January."
On this news, Okta's stock price fell $2.98 per share, or 1.76%, to close at $166.43 per share on March 22, 2022.
Later, on March 22, 2022, during after-market hours, in a statement on Okta's website, the Company's Chief Security Officer, Defendant David Bradbury ("Bradbury"), disclosed, inter alia, that "[a]fter a thorough analysis of [the LAPSUS$] claims, we have concluded that a small percentage of customers – approximately 2.5% – have potentially been impacted and whose data may have been viewed or acted upon."
Following Okta's updated statement, multiple news outlets reported that hundreds of the Company's clients were potentially affected by the January 2022 data breach. For example, on March 23, 2022, CNN published an article entitled "Okta concedes hundreds of clients could be affected by breach[,]" noting that, despite the Company's statement that "a small percentage of customers – approximately 2.5% – have potentially been impacted[,]" the Company "has over 15,000 customers, according to its website." That same day, Reuters and others published similar reports.
Separately, Okta was downgraded by Raymond James from "strong buy" to "market perform," noting, among other things, that "[w]hile partners were willing to trust Okta's track record, the handling of its latest security incident adds to our mounting concerns."
Following Okta's after-market update and Raymond James downgrade, the Company's stock price fell $17.88 per share, or 10.74%, to close at $148.55 per share on March 23, 2022.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP