In re Sprinklr, Inc. Securities Litigation

Background

Shane Boshart originally filed this proposed securities class action for himself and others similarly situated against Sprinklr, Inc. and certain of its officers. The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, and Rule 10b-5. The alleged violations concerned statements that purportedly inflated the price of Sprinklr common stock and caused investor losses.

The court considered an unopposed motion by Anthony Marcheschi to become lead plaintiff and to have Pomerantz LLP appointed lead counsel. Statutory notice of the action was published on August 13, 2024. Marcheschi and Todd Van Beurden each timely moved for lead-plaintiff status on October 15, 2024. On October 23, 2024, Van Beurden notified the court that he did not oppose Marcheschi’s motion and acknowledged that he appeared not to have the largest financial interest in the relief sought by the proposed class.

Lead Plaintiff

The Private Securities Litigation Reform Act requires the court to presume that the most adequate plaintiff is the person or group that timely responds to the notice, has the largest financial interest in the relief sought by the class, and preliminarily satisfies the relevant requirements of Federal Rule of Civil Procedure 23. That presumption may be rebutted by proof that the plaintiff cannot fairly and adequately protect the class’s interests or is subject to unique defenses.

The court found that Marcheschi satisfied these requirements. He timely filed his motion, purchased more than 10,245 Sprinklr shares during the proposed class period, and suffered approximately $33,846 in losses allegedly resulting from the defendants’ securities-law violations. The court was not advised of another potential lead plaintiff with a larger financial interest, and Van Beurden’s financial interest was smaller.

At this preliminary stage, the court required only a showing of typicality and adequacy under Rule 23. The court found Marcheschi’s claims typical because, like the other proposed class members, he alleged that the defendants made false and misleading statements that inflated Sprinklr’s stock price and caused investor losses. The court found no conflict of interest, unique defense, or other problem that would impair his ability to represent the class. No evidence or opposition rebutted the presumption in his favor.

Lead Counsel

The statute allows the most adequate plaintiff to select counsel, subject to court approval. Marcheschi selected Pomerantz LLP. The court found that Pomerantz had substantial experience prosecuting securities-fraud class actions, including serving as lead or co-lead counsel in many such cases, and appointed Pomerantz as lead counsel.

Disposition and Further Directions

The court appointed Anthony Marcheschi as lead plaintiff and Pomerantz LLP as lead counsel. By December 3, 2024, the plaintiff was directed to file a letter either requesting permission to file an amended complaint and proposing a filing date or stating that he did not seek to do so. The clerk was directed to change the caption to “In re Sprinklr, Inc. Securities Litigation,” remove Shane Boshart as a party from the docket, designate Marcheschi as lead plaintiff, and close the motions at Docket Items 18 and 21. This order addressed the leadership and counsel issues; the opinion did not decide the merits of the alleged securities-law violations.