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CHGG.US
id: 1383

Cheggs (CHGG) $55M Investor Settlement

Late claims are being considered for compensation, subject to approval.
$55,000,000
Cash Settlement
N.D. California
Court
5:21-cv-09953
Case number
05/05/2020
Class period Start
11/01/2021
Class period End
03/31/2025
Claim deadline
Chegg agreed to a $55 million settlement with $CHGG investors over claims it misled them about the sustainability of its pandemic-driven growth.

Overview

In 2021, Chegg was accused of hiding that the sustainability of its growth depended on remote learning driven by the Covid-19 pandemic. By late 2021, when the company reported a 10% drop in subscribers, $CHGG fell 50%. Following this, Chegg faced a lawsuit from investors.

Timeline
  • May 5, 2020 – Chegg reported record subscriber growth, with a 35% year-over-year increase, driven by remote learning during the pandemic.
  • November 1, 2021 – Chegg revealed a 10% decline in subscribers as students return to in-person learning, causing $CHGG to drop 50% and erase $4B in market value.
  • December 22, 2021 – Investors filed a lawsuit, alleging that Chegg misled them about the sustainability of its pandemic-driven growth.
  • September 26, 2024 – Chegg agreed to settle for $55M to resolve investor claims.
Background

During the COVID-19 pandemic, Chegg capitalized on remote learning, presenting its tutoring and study resources as essential academic tools. The company claimed that demand for its platform reflected a long-term shift toward digital education.

However, as schools returned to in-person learning, reports revealed that many students had primarily used Chegg to cheat on online exams rather than for legitimate academic support. As reliance on remote learning declined, so did Chegg’s subscriber base.

On November 1, 2021, Chegg reported a 10% drop in subscribers, leading to a 50% decline in $CHGG stock and wiping out $4B in market value.
Following this, on December 22, 2021, investors filed a lawsuit, claiming that Chegg misled them about the sustainability of its pandemic-driven growth.

What can investors expect now?

Chegg ($CHGG) has agreed to settle $55M with investors to resolve claims that it misled them about the long-term viability of its pandemic-driven subscriber growth.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Case Status
Accepting Late Claims
Alleged Offence
Misleading Statements
Financial Misrepresentation
Fraud
Failure to Disclose
Suspected Party
Directors
Management
Security Type
Stocks
Trade Direction
Long
Filing date
12/22/2021
Plaintiffs
Pompano Beach Police and Firefighters’ Retirement System
Attorneys
Johnson Fistel, LLP
Defendants
Daniel L. Rosensweig; Andrew J. Brown; Nathan Schultz
Administrator
A.B. Data Ltd
Court hearing date
04/24/2025
Exclusion deadline
03/27/2025
Objection deadline
03/27/2025
Class wide damages
$2,789,100,000
Trades matching type
FIFO

Chegg Inc

Chegg, Inc. provides individualized learning support to students that helps build essential academic, life, and job skills to achieve success in the United States and internationally. Its subscript...

    Ticker
    CHGG.US
    ISIN
    US1630921096
    CIK
    0001364954
    Sector
    Consumer Defensive
    Industry
    Education & Training Services
    Country
    USA
    Address
    3990 Freedom Circle, Santa Clara, CA, United States, 95054