Freshworks has taken a major hit after US-based litigation firms Scott + Scott Attorneys and The Schall Law firm filed lawsuits against the SaaS giant for providing 'false and misleading' documents during its Nasdaq listing.
While Scott+Scott Attorneys filed a securities class action lawsuit, Schall Law Firm filed a Freshworks class action lawsuit. According to one of the lawsuits, Freshworks' IPO documents omitted the fact that the company's business was experiencing financial 'obstacles.' The lawsuits were filed against Freshworks, as well as certain directors, officers, and underwriters of the company's September 2021 IPO. Despite continuing market rout, the company reported a $58 million loss in Q2 FY23.