Plaintiffs in Two Legal Cases Voluntarily Dismiss Claims Against Ebix Without Prejudice

JOHNS CREEK, Ga., July 27, 2023 (GLOBE NEWSWIRE) -- Ebix, Inc. (NASDAQ: Ebix), today issued an informational release declaring that the plaintiffs in two cases in the United States District Court for the Northern District of Georgia and Superior Court of Fulton County State of Georgia voluntarily dismissed their claims without prejudice. Those cases are respectively captioned Lilienfeld v. Raina, et al. and Shah v. Raina, et al.

Previously on July 17, 2023, the United States District Court Southern State of New York (SSNY) had issued a formal ruling in the matter of Ebix, Inc. (Ebix) vs. Rahul Saraf (Plaintiff) and dismissed the class action securities suit against Ebix. Ebix issued a press release announcing this dismissal on July 18, 2023.

Background -

On November 5, 2021, Daniel Lilienfeld, a purported shareholder of the Company, filed a derivative action in the United States District Court for the Northern District of Georgia on behalf of Ebix captioned Lilienfeld v. Raina, et. al. The complaint had asserted a claim of breach of fiduciary duty related to the RSM resignation against all the individual defendants.

On December 29, 2021, Sunil Shah, a purported shareholder of the Company, filed a derivative action in the Superior Court of Fulton County of the State of Georgia on behalf of Ebix captioned Shah v. Raina, et. Al. The complaint had asserted a claim of breach of fiduciary duty related to the RSM resignation against all the individual defendants.

On July 17, 2023, the United States District Court Southern State of New York (SSNY) issued a formal ruling in the matter of Ebix, Inc. (Ebix) vs. Rahul Saraf (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 amended 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 SSNY court for dismissal, arguing that, even with the new allegations, Plaintiff