A federal judge, Edgardo Ramos, at the U.S. District Court for the Southern District of New York, ruled that the allegations against Farfetch and former executives José Neves, Stephanie Phair, and Elliot Jordan were unfounded, siding with their defense.
The decision ordered the dismissal of the charges at the preliminary stage, preventing the case from proceeding to trial.
According to the information, the ruling was decisively in favor of Farfetch Limited and its former executives. This follows a lawsuit filed by a group of investors who claimed to have suffered losses due to alleged false or misleading information by the company and its executives, allegations rejected by the court.
Investors of Farfetch failed to adequately claim that the now-defunct luxury goods e-commerce company and its key executives had misrepresented their growth and financial status, as per the federal court.
The class action suggested that Farfetch raised over a billion dollars during its 2018 IPO with an eight billion dollar valuation, despite never posting profits.
Beginning in February 2022, post-pandemic recovery, Farfetch allegedly misled investors about a growth slowdown and partnership matters with brands like Reebok.
Farfetch’s financial disclosures in the second half of 2023 led to significant stock declines, according to investors.
Investors engaged in “confusing arguments,” presenting blocks of quoted text without specifying alleged false statements, said the judge. They also failed to demonstrate actionable false or misleading statements.
