Class action suit filed against Constant Contact


A law firm has filed a class action claim against an online marketing solutions provider following allegations that the company violated federal securities laws by misleading shareholders.

The securities class action suit against Constant Contact Inc. was filed in the U.S. District Court for the District of Massachusetts on behalf of investors who purchased shares in the company during the class period between Oct. 23, 2014 and July 23, 2015. The firm offers online marketing tools to small businesses, nonprofits and similar organizations.

The complaint alleges that Constant Contact failed to disclose numerous things about its operations to investors, meaning statements about its business and prospects lacked any reasonable basis. For example, the class action lawsuit claimed that the company failed to disclose it was dealing with negative “trends in customer conversion rates,” and that it had begun pushing new clients toward its most affordable offerings.

“Constant Contact failed to disclose numerous things about its operations to investors.”

On July 23, 2015, following the market’s close, Constant Contact revealed its second quarter earnings report, along with a weak forecast for the forthcoming three months. The report disclosed that the company had low trial-to-conversion rates in April and May of 2014. Additionally, the marketing solutions provider experienced a substantial change in product mix, with 80 percent of clients choosing to go with the firm’s least expensive email package over more expensive services.

On news of the weak expectations for the third quarter, disappointing conversion rates and client preference for cheaper services, stock prices in the company fell $3.35 per share, or over 11 percent, to close at $26.18 per share on July 24, 2015.

For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or