In the dismissal of a class action by Yelp shareholders a federal judge ruled that “a reasonable investor would have known that some of the reviews on Yelp’s website were inauthentic.” On November 24, 2015 US District Judge Jon Tigar (Northern District of California) granted Yelp’s Motion to Dismiss in the case Joseph Curry et al v. Yelp Inc et al as reported by the Reuters:
Shareholders led by Joseph Curry accused Yelp of inflating its share price by falsely touting the reliability of its reviews, as part of a calculated strategy to extort businesses into buying ads or making payments in exchange for removing bad or fake reviews.
Yelp’s share price fell 18 percent over three days in April 2014, when the Federal Trade Commission revealed 2,046 complaints over five years against the San Francisco-based company,
But the judge said only 11 of the complaints accused Yelp of offering to manipulate reviews in exchange for fees, a small number “especially when compared to the tens of millions of reviews hosted by Yelp.”
No surprise by the Court’s Order since everyone knows that all reviews posted are not real!