In re Oatly Group AB Securities Litigation

In a class action on behalf of purchasers of American Depositary Shares of the oatmilk company Oatly Group AB (Oatly), the federal district court for the Southern District of New York found that plaintiffs failed to plead a legally sufficient and plausible set of allegations conforming to the Private Securities Litigation Reform Act for violations of federal securities law. The plaintiffs had asserted in their second consolidated complaint that the Oatly defendants failed to disclose severe supply problems and declining market share in Oatly’s offering documents. Earlier pleadings had also asserted that Oatly overstated its sustainability practices, but the second consolidated complaint dropped the greenwashing allegations. The court granted the plaintiffs to replead their claims, except that the court dismissed with prejudice a count under Section 12(a) of the Securities Act of 1933. The court set a deadline of August 11, 2023 for the filing of an amended complaint.

Two securities class actions filed in the federal district court for the Southern District of New York alleged that Oatly Group AB, the oatmilk company, and Oatly officials and directors made false statements and failed to disclose adverse facts that deceived the investing public and artificially inflated the prices of Oatly stock shares between the time of the company’s initial public offering in the United States in May 2021 and July 2021, when a short seller issued a report on “a number of improprieties at Oatly, including improper accounting practices and greenwashing (making the Company’s product appear more sustainable than it actually is).” The complaint alleged that Oatly’s statements in the registration statement filed with the Securities and Exchange Commission and in an investor presentation including misleading statements related to the greenhouse gas emissions and energy consumption associated with its product.