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- Lawsuit alleges company concealed safety issues ahead of IPO
- Lyft argued alleged assaults, bike share problems were known
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(Reuters) - A California federal judge said investors in Lyft Inc's initial public offering can proceed as a class on claims that the ride-hailing service did not disclose safety issues including alleged sexual assaults by drivers.
U.S. District Judge Haywood Gilliam Jr certified a class of investors who bought shares in Lyft's $2.34 billion IPO on Friday, rejecting the company's argument that individual inquiries were needed to show whether investors knew about the issues before buying in.
Attorneys for the parties did not immediately respond to requests for comment on Monday.
Investor Rick Keiner's lawsuit faults the company and its officers and directors for failing to disclose what he called a "pervasive" problem of sexual assaults by drivers and brake issues plaguing its bike share fleet.
Keiner claims Lyft omitted the information as it sought to position itself as more socially responsible than competitor Uber Technologies Inc.
Gilliam trimmed the case in September, dismissing allegations the company misrepresented its financial prospects.
In urging the judge to reject class status, Lyft had pointed to its interviews with some investors who said they were aware of the issues.
Gilliam said the declarations only showed a general awareness and did not defeat the plaintiff's claims.
Lyft and its IPO underwriters have made those arguments in a similar lawsuit in California state court. The judge in that case has yet to rule on the motion.
Uber is also facing a shareholder lawsuit about its disclosures on passenger safety and other issues ahead of its 2019 IPO.
The case is In re Lyft Inc. Securities Litigation, U.S. District Court, Northern District of California, No. 19-cv-02690
For the proposed lead plaintiff: Whitney Street of Block & Leviton
For Lyft: Matt Rawlinson of Latham & Watkins