When Match Group launched its newest earnings this week, its CEO Spencer Rascoff boasted that Hinge, one in all its flagship relationship apps, was “crushing it,” with development accelerating regardless of experiences that younger customers are breaking apart with relationship apps. Income was up 25% in comparison with the identical quarter the prior 12 months, and customers had flocked to the location. Beforehand languishing Tinder was additionally exhibiting indicators of a turnaround. Match’s inventory popped 12% that day.
However the day earlier than that earnings name, a Match Group shareholder named Ned Habedus filed a lawsuit towards the corporate’s board of administrators, together with Rascoff and former CEO Bernard Kim, that raises questions in regards to the firm’s management and the board’s priorities within the wake of a bombshell investigation printed earlier this 12 months.
That media report, “Relationship App Cowl-Up: How Tinder, Hinge, and Their Company Proprietor Maintain Rape Below Wraps,” by the Pulitzer Heart and Calmatters, co-published by The Guardian and The nineteenth, grew out of 18 months of reporting and is broadly excerpted within the new lawsuit, which was filed in a federal court docket in central California.
Quoting the reporting, the lawsuit alleges that “‘Match Group has recognized… which customers have been reported for drugging, assaulting, or raping their dates since a minimum of 2016, in keeping with inside firm paperwork. Since 2019, Match Group’s central database has recorded each consumer reported for rape and assault throughout its total suite of apps; by 2022, the system, often known as Sentinel, was accumulating a whole bunch of troubling incidents each week, firm insiders say.’”
Match didn’t reply to Fortune’s request for touch upon the brand new lawsuit. Nor did its former CEO Bernhard Kim. When the investigation was printed, the corporate instructed the media shops that it “vigorously combats violence,” in keeping with the report. “We are going to all the time work to spend money on and enhance our techniques, and seek for methods to assist our customers keep secure, each on-line and once they join in actual life,” Match Group mentioned in a press release on the time. It additionally mentioned: “We take each report of misconduct severely, and vigilantly take away and block accounts which have violated our guidelines concerning this habits.”
Nonetheless, Match Group has not but produced a promised report that might give all stakeholders, together with prospects, a transparent sense of the dangers dealing with customers. And a few accused offenders discovered methods to remain on the location, permitting them to proceed trawling the web sites for potential targets—typically for months or years—even after their crimes had been reported to Match.
The criticism additionally claims, once more citing the investigative report, “In a single notably outrageous instance… heart specialist Stephen Matthews retained entry to Match’s platforms as late as January 25, 2023, regardless of a consumer reporting him for sexual assault on September 28, 2020. Match solely eliminated his profile after he was arrested by legislation enforcement.” In 2024, Matthews was convicted by a Colorado court docket of drugging 10 ladies he met via relationship apps Hinge and Tinder, and sexually assaulting eight of them. He was sentenced to serve 158 years in jail.
An lawyer for the plaintiff declined to remark and pointed Fortune to the criticism.
Match Group, a $8.8 billion firm, owns greater than a dozen apps, together with Tinder, Hinge, Match, Meetic, OkCupid, and Loads Of Fish. The lawsuit seeks damages from the executives and board members named for breaches of fiduciary responsibility, securities legislation violations, and unjust enrichment. It additionally requires reforms to company governance and danger oversight, restitution of government pay, and different prices incurred by the corporate.
It’s a spinoff lawsuit, by which a shareholder brings claims towards management on behalf of the corporate. Any funds ordered by the court docket go to the corporate, and shareholders profit not directly. (Usually, administrators have insurance coverage insurance policies that can cowl such funds. If the misconduct is just not lined by the insurance policies, nevertheless, board members are obliged to cowl the prices themselves.)
The Pulitzer Heart report opens with a harrowing and detailed account from one in all Matthews’ victims, who says that when she visited Matthews at his dwelling, he drugged and assaulted her. She was in a position to escape and get into an Uber, and after the results of the drug had worn off, she reported the incident to Match. On the time of that assault, two different ladies had already reported Matthews to the location, in keeping with the report.
In a number of instances, the lawsuit compares what the corporate disclosed in securities filings and through analyst calls with what the Pulitzer Heart’s report alleged that the corporate already knew. For instance, the authorized submitting states that the corporate revealed falling month-to-month lively consumer figures for Tinder in November 2024 with out disclosing what the plaintiff alleges was the actual purpose the app was shedding prospects: the long-running questions of safety outlined within the exposé printed just a few months later.
“Competitors or financial concerns didn’t trigger the fast decline in Tinder’s MAU,” the criticism says. “It faltered as a result of customers had grown uninterested in assembly abusers and predators on the platform.”
“Customers additionally had been annoyed by the Firm’s failure to curtail this nefarious conduct,” it continues, “which was recognized to the Firm’s management.”
