Cooley Wins Early Summary Judgment for Freshworks in Securities Class Action

New York – April 11, 2025 – Cooley secured an early summary judgment for Freshworks in a putative securities class action under Section 11 of the Securities Act – before class certification and with minimal discovery.

Judge Charles Breyer of the US District Court for the Northern District of California ruled that “no omission by Defendants caused Freshworks’s stock price to drop below the IPO price” and confirmed that Section 11 plaintiffs “cannot recover for drops above the IPO price.”

Freshworks went public in September 2021, disclosing strong Q2 results but omitting interim Q3 data. After Freshworks announced full Q3 results on November 2, 2021 the stock declined on November 3 and 4 but remained above the initial public offering (IPO) price until November 15. The plaintiff filed suit under Sections 11, 12(a)(2) and 15 of the Securities Act, claiming Freshworks should have disclosed its interim Q3 results in the offering documents.

After narrowing the case through two pleading-stage motions, Cooley quickly moved for summary judgment – supporting the motion with an economic expert report showing that the market was efficient and that the stock had absorbed the earnings release well before the price first dipped below the IPO price. Judge Breyer agreed with Cooley on both the facts and the law, granting summary judgment in full.

Read the order

The Cooley team representing Freshworks includes partners Brian French and Shannon Eagan and associates Linh Nguyen, Andy Johnson, Trevor O’Bryan, Anne Bigler, Anuva Ganapathi and Claire Olin.

The case is Sundaram v. Freshworks Inc. (Case No. 22-cv-06750-CRB).

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