Lightspeed would pay $11 million CAD and admit no wrongdoing in proposed lawsuit settlement

Montréal-based Lightspeed Commerce is admitting no liability in the proposed settlement of a 2021 class-action lawsuit alleging it misrepresented financial reports.

The proposed settlement will see the defendants, which include Lightspeed, some of its leaders, and its auditor PricewaterhouseCoopers, pay out $11 million without any admission of liability.

Settlement follows the dismissal of a similar case against Lightspeed in the Eastern District of New York earlier this year.

The settlement was proposed in June and is subject to the approval of a Superior Court of Québec judge at a Nov. 21 hearing in Montréal. The class-action’s lawyers will also ask the court to approve their previously agreed-upon legal fees. Those fees represent one third of the settlement amount, plus disbursements and taxes. From there, the approved settlement will be distributed to the class on a proportional basis.

The lawsuit was filed in October 2021 following a report from New York-based investment firm Spruce Point Capital Management that alleged the e-commerce company had inflated key metrics and wasn’t performing as well as it claimed.

Spruce Point alleged it had “evidence of poor, inconsistent, and continually changing disclosures,” which led it to believe that Lightspeed had “engaged in a pattern of materially inflating the size, quality, and growth prospects of its business.” This included allegations that Lightspeed had “massively inflated” its pre-IPO business, including its customer count (85 percent higher) and gross transaction volume (10 percent higher).

Lightspeed said at the time that the report contained “numerous important inaccuracies and mischaracterizations,” and the company continues to admit no wrongdoing through this proposed settlement. Still, Lightspeed’s trading value on the Toronto Stock Exchange went from nearly $160 CAD per share before the report to almost $50 CAD per share by the end of 2021.

This settlement agreement follows the dismissal of a similar case against Lightspeed in a United States federal court earlier this year. In the dismissal, the judge ruled that the plaintiff failed “at the first step” and alleged “no plausible reasons why Lightspeed’s statements were false or misleading.”

When Lightspeed put forward the proposed settlement of the Canadian case in June, CEO Dax Dasilva said that a resolution would help his company “remain focused on [its] transformation.” In its most recent earnings report, Lightspeed posted nearly $305 million USD in revenue and more than $129 million USD in gross profit during the first quarter of fiscal 2026. That exceeded its previously established outlook for both metrics.

Members of the class-action lawsuit include any person or entity who purchased securities in Lightspeed between March 7, 2019, and Nov. 3, 2021. Those unwilling to participate in the proposed class action, or receive any benefits from the settlement, are required to submit an opt out form by Oct. 15.

Feature image courtesy Lightspeed.