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RKS represented Montague Street LP and its affiliates as co-lead plaintiff in a securities class action in the U.S. District Court for the Southern District of New York against Talkspace, Inc., an online therapy platform taken public in June 2021 through a merger with a blank-check special purpose acquisition company (“SPAC”). RKS, along with Robbins Geller Rudman & Dowd LLP, brought claims under (i) Section 10(b) of the Securities Exchange Act of 1934, alleging that defendants made materially false and misleading statements between June 11, 2020 and November 15, 2021, and (ii) Sections 14(a) and 20(a) of the Exchange Act, alleging that the proxy statement to approve the SPAC merger was materially false and misleading.
Plaintiffs alleged that unbeknownst to investors, at the time of the SPAC merger, Talkspace was experiencing substantial operational difficulties, including an inability to match clients with therapists (thereby negatively impacting customer retention), materially increased business-to-consumer customer acquisition costs segment, disappointments in its business-to-business segment, and inadequate internal controls and procedures. In addition, Plaintiffs alleged that Talkspace’s executives and co-founders never intended to remain with Talkspace after the SPAC merger.
With the motion to dismiss fully briefed before the Hon. Paul G. Gardephe, the parties achieved a settlement of the claims for $8.5 million.