b'Finally, the court concluded that plaintiffs had notLike those services, we do not generally verify the adequately pled loss causation because the lossinformation posted by users, interview users or conduct emanated only from the disclosure of negativeemployment-level background checks. She also information without a prior false or misleadingstated that the company relied on a model of shared statement. The court concluded plaintiffs Sectionresponsibility, meaning customers could either conduct 20(a) claim also failed in the absence of a predicatetheir own background checks or pay Care.com to do Section 10(b) violation.so. The article further reported that it found hundreds of instances in which day-care centers appeared to be falsely listed on Care.com as being licensed, that Toussaint v. Care.com, Inc., Case No.some listed centers appeared not to exist, and that 1:19-cv-10628, 2020 WL 5751527a spokesperson for the company stated that it adds (D. Mass. Sept. 25, 2020)listings based on publicly available data. Background Checks And Verification OfOn March 11, 2019, the company issued a Form 8-K stating Information On Marketplace Platform that it would change its caregiver screening practices and that it would no longer release any applications Care.com, Inc. (Care.com) is an online marketplaceor permit those caregivers to send messages on the for finding and managing family care. The companyplatform until the completion of its preliminary screening distinguishes itself from other platforms, such asprocesses. The Form 8-K also stated that Care.com had Craigslist, based on the companys screening andused publicly available data to create directory listings for vetting procedures for caregivers listed on its website.small and medium-sized businesses that provide childcare On May 23, 2016, the companys founder and CEOservices. The companys stock price fell by 12.6% that stated at an investor conference: We have [ ] about 7day. On March 31, 2019, the Wall Street Journal further million caregivers that we have vetted [W]e continuereported that, just before the release of its March 8 story, to invest [in safety] and it has been the baseline productCare.com. removed about 72% of day-care centers, over from day one, [we have] invested in background46,594 businesses, listed on its site[.] Those businesses checking that include[s] national criminal record [and]were listed on the site as recently as March 1. On April 1, sexual offender registry. At other industry conferences,2019, the companys stock declined again by 6.6%.in numerous investor presentations, and in SEC filings from 2016 through early 2019, the company and itsInvestors filed a putative class action againstofficers frequently made similar statements promotingCare.com, its CEO, and CFO alleging that theythe companys trustworthiness and reliability relativeviolated Sections 10(b) and 20(a) of the 1934 Act and to competitors based on the companys security,Rule 10b-5 promulgated thereunder through misleading quality control measures, and its trusted brand. Thestatements regarding Care.coms screening and vetting company also stated in its Forms 10-K and 10-Qs forprocesses of individual providers or caregivers, safety 2016, 2017, and 2018 that it served day-care centersand security measures in comparisons to competitors, that wish to market their services to our care-seekingand manner of marketing to daycare centers, and families, and described its proactive screening oftheir failure to disclose that daycare centers were certain member information. The company warned innot pre-screened. its Forms 10-K for 2016, 2017, and 2018 of the businessDefendants moved to dismiss on November 1, 2019, risk of negative publicity affecting its brand. asserting that plaintiffs failed to plausibly allege any In March 2019, the Wall Street Journal published anmaterially false or misleading statements, noting that article in which the companys CEO stated that Care. plaintiffs allegations of falsity were refuted by Care.com is a marketplace platform, like Indeed or LinkedIn.coms public disclosures and that any other statements 87'