Case 2: -CW Document 19 Filed 12/27/12 Page 1 of 82 Page ID #:216 1 I
DEC 1 Lionel Z. Glancy (#134180) Robin B. Howald (9110280) Dili 2 Robert V. Prongay (#270796) 3 GLANCY BINKOW & GOLD1ERG LLP 1925 Century Park East, Suite 2100 CLERK 4 Los Angeles, California 90067 5 Telephone: (310) 201-9150 DEC 2 2012 / 6 Facsimile: (310) 201-9160 CENTRAL DISTRICT OF CALIFORNIA 7 Attorneys for Lead Plaintiff Bryan Zee 8 [Additional counsel and plaintiff on signature page] 9 10 UNITED STATES DISTRICT COURT 11 CENTRAL DISTRICT OF CALIFORNIA 12 13 IN RE GREEN DOT Master File No. CV 12-6492-GW CORPORATION SECURITIES (CWx) 14 LITIGATION 15 CLASS ACTION 16 17 CORRECTED1 CONSOLIDATED 18 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES 19 LAWS 20
21 JURY TRIAL DEMANDED 22 23 24 25 ORIGINAL 26 27 28 'Corrected only to fix typographical and formatting errors. Case 2:12 -CW Document 19 Filed 12/27/12 Page 2 of 82 Page ID #:217
1 TABLE OF CONTENTS 2 3 OVERVIEW...... 1 4 BACKGROUND AND CLASS PERIOD CHRONOLOGY...... 5 5 JURISDICTION AND VENUE...... 15 6 PARTIES...... 15 7 8 CLASS ACTION ALLEGATIONS...... 17 9 SUBSTANTIVE ALLEGATIONS ...... 19 10 COUNT I 11 Violation of Section 11 of the Securities Act (Against All Defendants) ...... 19 12 COUNT II 13 Violation of Section 15 of the Securities Act 14 (Against Defendants Streit and Keatley) ...... 29 15 COUNT III 16 Violation of Section 10(b) of the Exchange Act and Rule 1 Ob-5 Promulgated Thereunder 17 (Against All Defendants) ...... 30 18 Green Dot's Retail Distribution Channel ...... 32 I 19 20 Defendants Touted Green Dot's Exclusive Relationships ...... 33 21 Defendants Stated that Revenue Gains Would Come 22 from Same-Store Sales Growth...... 35 23 Defendants Repeatedly Denied that Competition Posed a Problem ...... 36 24 Retail Competition Began to Intensify by Mid-2011 ...... 38 I 25 26 27
28 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 1 Case 2:12 -CW Document 19 Filed 12/27/12 Page 3 of 82 Page ID #:218
1 TABLE OF CONTENTS (continued) 2 3 4 Defendants Knew that Green Dot Would Have to Implement More Stringent Risk Controls, Creating a Drag on Growth...... 42 5 Defendants' Materially False and Misleading Statements Regarding 6 Green Dot's Initial 2012 Guidance ...... 44 7 8 Investors Learn of Bluebird's Launch at Walmart...... 47 9 Defendants' Materially False and Misleading Statements Regarding 10 Green Dot's Updated 2012 Guidance ...... 49 11 The Truth Is Revealed When Green Dot Slashes Its 2012 Guidance...... 56 12 Defendants' Inadequate Explanations for 13 Their Unreasonable Guidance...... 58 14 Additional Allegations of Scienter...... 62 15 16 LossCausation ...... 65 17 Presumption of Reliance (Fraud-on-the-Market Doctrine) ...... 68 18 Inapplicability of Safe Harbor ...... 70 19 20 Defendants Violated Section 10(b) of the Exchange Act and Rule lOb-S Promulgated Thereunder...... 70 21 22 COUNT IV Violation of Section 20(a) of the Exchange Act 23 (Against the Individual Defendants) ...... 72 24 PRAYER FOR RELIEF...... 73 25 26 JURY TRIAL DEMANDED ...... 74 27
28 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 11
Case 2: 12-cv-06492-GW-CW Document 19 Filed 12/27/12 Page 4 of 82 Page ID #:219