| SAN FRANCISCO
SAN FRANCISCO Aug 6 Yelp Inc and its
executives were accused in a lawsuit of selling more than $81
million in stock while deceiving shareholders about the quality
of consumer reviews on its website.
The proposed class action, which was filed in U.S. District
Court in San Francisco on Wednesday, said Yelp's share price had
reached artificially inflated prices of over $98 earlier this
year because the company had misrepresented its true condition.
"Reviews, including anonymous reviews, appearing on the
company's website were not all authentic 'firsthand' reviews,"
the lawsuit said, "but instead included fraudulent reviews by
reviewers who did not have first-hand experience with the
Yelp said in a statement that the allegations "are without
merit" and said it "will vigorously contest them."
As media reports about problematic consumer reviews surfaced
earlier this year, Yelp stock sunk to just under $66 per share
in April, the lawsuit said. Before the stock drop, Chief
Executive Jeremy Stoppelman sold over 132,000 shares for
proceeds of over $2.5 million, according to the lawsuit.
The company reported its first quarterly profit as a public
company last week. Its shares closed at $67.78 on Wednesday.
The lawsuit in U.S. District Court, Northern District of
California is Joseph Curry, individually and on behalf of all
other similarly situated vs. Yelp Inc et al, 14-03547.
(Reporting by Dan Levine; Editing by Leslie Adler)