In the world of publicly traded companies, information is a currency. While many disclosures are mandated, companies often choose to voluntarily share additional details to give investors a clearer picture of their business. This can include information about major partnerships or key customers. However, once a company chooses to open this door, the information it provides must be truthful and accurate. This is not just a matter of good business practice; it’s a legal obligation under the U.S. securities laws.

When companies make false or misleading statements about a material fact—a fact an investor would consider important in their decision to buy or sell a security—they can face a securities class action lawsuit. Such a lawsuit is brought on behalf of a group of investors who suffered financial losses because of these misrepresentations. The legal exposure for corporations can be significant, and these cases often center on allegations of fraud, misrepresentation, or corporate misconduct.

One prominent example of a securities class action related to client relationships is the case involving Synchrony Financial and Walmart. In July 2018, news broke that Walmart was considering ending its partnership with Synchrony because the retailer wanted Synchrony to approve a higher percentage of applicants. This news caused Synchrony’s share price to drop significantly. The lawsuit claimed that Synchrony had falsely stated it was not receiving “pushback” from its retail partners, despite the deteriorating relationship with Walmart.

The class action, which ultimately settled for $34 million, highlights how a company’s voluntary statements about its key customers, when allegedly inaccurate, can lead to severe consequences for investors and the company itself. The truth about the relationship with a key client, in this case, was allegedly a material fact that was not accurately disclosed to investors.

The Synopsys Investigation

The key client issue is now at the center of an investigation into Synopsys, Inc. (SNPS). Following the company’s third-quarter 2025 financial results, which revealed “significant problems with a major foundry customer,” its share price cratered by over 36%.

Hagens Berman is now investigating whether Synopsys may have misled investors about its customer risks and growth prospects. Synopsys had previously assured investors that its largest customer, Intel, while reducing its R&D spend, would not "impact generally the EDA software" and had downplayed risks due to "committed, non-cancellable" agreements.

Hagens Berman is looking into whether the company may have misled investors about the risks posed by its high concentration with a single customer.

Conclusion

Transparency in public disclosures is a powerful tool that can lead to increased investor trust and loyalty. When a company chooses to share information about its key relationships, it must ensure that what it says is true and not misleading. Ultimately, a lack of accuracy in these disclosures can lead to significant financial losses for investors, legal battles, and a damaged corporate reputation.