Southern District Court of New York Dismisses Securities Suit Against Ebix

JOHNS CREEK, Ga., July 18, 2023 (GLOBE NEWSWIRE) -- Ebix, Inc. (NASDAQ: Ebix), today issued an informational release declaring that the United States Southern District Court State of New York (SDNY) yesterday issued a formal ruling in the matter of Ebix, Inc. (“Ebix”) vs. Rahul Saraf (the “Plaintiff”) and dismissed the class action securities suit against Ebix. The District Court also denied the Plantiff’s request to file new amended claims, after reviewing the previous three complaints, and ordered the dismissal of the third amended complaint.

The Plaintiff had filed a Third Amended Complaint. It includes four sets of new allegations:

• First, that Ebix officers Raina and Hamil had a motive to conceal the weakness in internal controls to ensure a successful IPO — and that this IPO was Ebix’s only hope of avoiding insolvency.
• Second, that Raina switched his compensation from stock to cash in 2021 because he knew of a weakness in Ebix’s internal controls.
• Third, that Raina and Hamil allegedly admitted a material weakness in internal control at EbixCash in the DRHP and
• Fourth, that a “damning” report by Hindenburg Research — and Defendants’ responses to it — reveal knowledge of the alleged weakness.

Ebix requested SDNY court for dismissal, arguing that, even with the new allegations, Plaintiff did not establish scienter (the validity of the allegations). The court agreed and Ebix’s motion to dismiss was GRANTED, and the Third Amended Complaint dismissed.

Earlier in this putative class action, the Plantiff had brought securities fraud claims against Ebix and two Ebix executives, Robin Raina and Steven Hamil (the “Individual Defendants”). The court ruled that Plaintiff had alleged that, between November 9, 2020, and February 19, 2021 (the “Class Period”), Defendants made material misstatements regarding Ebix’s internal control over its financial reporting. In a prior Opinion and Order, the court had granted Ebix’s motion to dismiss the Second Amended Complaint, finding that Saraf failed to plead scienter. Thereafter, Saraf filed the operative Third Amended Complaint, adding the above four sets of allegations.

This release should not be construed as “Investment or Legal Advice” and should be read only as a simplified disclosure for Ebix investors, pertaining to relevant matters.

About Ebix, Inc.

With approximately 200 offices across 6 continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to provide on-demand infrastructure exchanges to the insurance, financial services, travel and healthcare industries.