SAN FRANCISCO (Legal Newsline) - Public pension funds unhappy with their investment in a cybersecurity company want a federal judge to certify a class in their class action lawsuit.
Okta has called the case "meritless," but securities firms Labaton Sucharow and Wagstaffe, Von Loewenfeldt, Busch & Radwick disagree and on Nov. 1 filed their motion for class certification.
Their plaintiffs are the Nebraska Investment Council and the North Carolina Retirement System.
"This action is ideally suited for class treatment under Rule 23," the motion says. "First, this class is sufficiently numerous - far exceeding the minimum presumptive threshold of 40 geographically dispersed investors, with over 153,050,000 shares of common stock outstanding."
There are common questions of law and the plaintiffs' claims are typical of others', the motion says.
Litigation started in May 2022.The complaint says the company had inadequate safety measures during the class period, which led to hackers known as LAPSUS$ posting screenshots of Okta's internal company environment.
The company on March 22, 2022, declared 2.5% of customers had potentially been impacted. News coverage noted the company had more than 15,000 customers at the time.
Raymond James downgraded the company from "strong buy" to "market perform," citing concerns over the security incident. Its stock price fell $17.88 per share - nearly 11% - to $148.55 after the downgrade.
Okta said it promptly reported everything it knew about the cyberattack, but litigants "reflexively" sued despite the company claiming the incident had no impact on its financial state.
"Although its themes are well worn, Plaintiff faced particularly unfavorable facts because the security incident at the heart of this case never even breached Okta's or its customers' systems, caused minimal harm, and was broadly disclosed soon after Okta learned about it," a motion to dismiss says.