Block Inc., the company helmed by Twitter co-founder Jack Dorsey, has sidestepped a major legal challenge tied to its Cash App platform. A federal judge in Manhattan dismissed claims that the company deceived investors over a 2021 data breach that exposed the personal details of millions of users.
The case centered on a December 2021 incident when a former employee downloaded sensitive information from roughly 8.2 million Cash App accounts. Investors alleged Block kept quiet for months, waiting until April 2022 to acknowledge the breach, all while overstating the strength of its data protections and inflating its stock value. They also argued the company misled shareholders of Afterpay, the Australian “buy now, pay later” firm Block acquired for $29 billion.
In a 42-page ruling, Judge Margaret Garnett rejected the claims, noting there was no evidence Block intended to dupe shareholders. She ruled that the company’s broad risk disclosures couldn’t reasonably be interpreted as a guarantee of airtight security. Nor did investors show any link between the alleged misstatements and the Afterpay deal, or that Block’s leadership stood to personally profit from such deception.
The dismissal comes as Block continues to juggle scrutiny from regulators. Earlier this year, the company paid $80 million to resolve accusations from nearly every U.S. state that Cash App’s anti-money laundering safeguards were inadequate, followed by a separate $40 million settlement with New York.
Despite the legal clouds, Cash App remains a giant in digital payments, reporting $283 billion in inflows and 57 million monthly active users at the close of 2024.
The case was filed as In re Block Inc Securities Litigation in the Southern District of New York.
