Thirteen of Wall Street's largest financial institutions face a class action lawsuit over the initial public offering of Via Transportation Inc., a New York-based provider of software and technology-enabled services for public transit agencies. The complaint, filed June 9 in the U.S. District Court for the Southern District of New York, alleges that the offering documents failed to disclose two material facts that contributed to a subsequent collapse in the company's share price.
Via went public on the New York Stock Exchange on September 15, 2025, selling 10,714,285 shares at $46 each. The company anticipated gross proceeds of approximately $493 million, according to the complaint. The underwriters, which include Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Allen & Company, Wells Fargo Securities, Deutsche Bank Securities, Guggenheim Securities, Citizens JMP, Needham & Co., Oppenheimer & Co., Raymond James & Associates, William Blair & Co., Nomura Securities International, and WR Securities, collectively earned $24.6 million in underwriting discounts and commissions.
The lead plaintiff, investor Stephan Garlesky, who purchased shares in the offering, filed the class action on behalf of all similarly situated investors. The suit alleges that the registration statement and prospectus omitted two critical pieces of information: first, that Via's annual run-rate revenue (ARR) per customer had already begun to decline; and second, that regulatory obstacles in Germany were expected to impede the company's growth plans in that market.
A distinctive feature of the lawsuit is that it expressly disclaims allegations of fraud. Instead, the claims are brought under Sections 11, 12, and 15 of the Securities Act of 1933, which impose strict liability and negligence standards. Under Section 11, underwriters can be held liable for material misstatements or omissions in registration statements unless they can demonstrate that they conducted a reasonable due diligence investigation. The complaint asserts that none of the named underwriters performed adequate due diligence, thereby forfeiting that affirmative defense.
The stock's decline unfolded in stages. On November 13, 2025, Via's Chief Financial Officer Clara Fain disclosed on an earnings call that ARR per customer had fallen for the first time in eight quarters. Shares dropped nearly 13% to $43.14. On February 27, 2026, Chief Executive Officer Daniel Ramot acknowledged that the company was "facing some headwinds . . . in Germany," sending the stock down almost 8% to $17.18. On May 12, 2026, after further negative news regarding the German regulatory environment, shares fell more than 17% to $14.12, representing a decline of nearly 70% from the IPO price.
For financial advisors and their clients, the case underscores the importance of scrutinizing underwriting practices. When a newly public company's stock falters, plaintiff law firms routinely examine offering documents and often name underwriters as defendants alongside the issuer. The due diligence file maintained by the underwriter serves as a critical line of defense. As the complaint highlights, failure to conduct a thorough investigation can expose banks to significant liability.
This lawsuit arrives amid heightened scrutiny of IPO disclosures and underwriting standards. In a separate development, ERShares CEO Rejects $400M in Inflows to Shield XOVR Investors Ahead of SpaceX IPO, illustrating the lengths some firms go to protect investors from potential conflicts. Meanwhile, a recent Nationwide Survey: 34% of Women Investors Find Advisors Condescending highlights persistent communication gaps in the advisor-client relationship.
The case is Garlesky v. Via Transportation Inc. et al., No. 1:26-cv-04567 (S.D.N.Y.).
