Equinix, Inc. (EQIX) Securities Fraud Class Action

Equinix, a data center giant, finds itself in hot water with investors and regulators following a scathing report by short seller Hindenburg Research. The report alleges accounting manipulation and potential risks to the company's core business, triggering an investor class action lawsuit and launching investigations by the U.S. Attorney’s Office and the SEC.

Hindenburg’s Mar. 20, 2024 report accuses Equinix of inflating its profitability metric, Adjusted Funds from Operations (AFFO), by misclassifying maintenance expenses as growth investments. This alleged scheme could have boosted 2023 AFFO by as much as 22%, according to Hindenburg.

The report, based on employee interviews and financial statement analysis, paints a picture of widespread manipulation driven by management. It further alleges that executives received hefty stock-based compensation tied to inflated AFFO figures, potentially enriching themselves at investors’ expense.

Beyond accounting concerns, Hindenburg raises red flags about Equinix's data center capacity. The report alleges the company oversold its power supply, potentially struggling to meet future demand from AI-driven workloads.

Equinix has denied Hindenburg’s allegations, claiming an internal audit found no wrongdoing. However, the accusations sparked a class action lawsuit from investors who purchased Equinix shares between May 3, 2019, and Mar. 24, 2024. The lawsuit alleges that Equinix issued misleading statements and failed to disclose its accounting practices. Following the report, Equinix's stock price plummeted causing investor losses.

Adding to the company’s woes, both the U.S. Attorney’s Office and the SEC issued subpoenas in Apr. 2024, signifying formal investigations into Hindenburg's claims.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the EQIX investigation about?

We are investigating whether Equinix inflated it’s AFFO and overstated its data center capacity.

WHAT SHOULD I DO?

I worked at EQIX. What should I do?

If you were an employee of EQIX, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICPATE?

Am I affected? What do I need to do to participate?

If you were an investor in EQIX, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any EQIX investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.