An Oklahoma-based law firm announced the filing of a securities class action lawsuit against TrueCar in U.S. District Court.

On Friday, Federman & Sherwood announced that the complaint was filed Wednesday in the United States District Court for the Central District of California.

In its news release, the law firm said: “The complaint alleges violations of federal securities laws under the Securities Exchange Act of 1934, including allegations of issuing a series of material or false misrepresentations to the market which had the effect of artificially inflating the market price during the Class Period, which is May 16, 2014 through May 20, 2015.

“More specifically, this litigation was filed because the Company made false and/or misleading statements and/or failed to disclose that: (i) TrueCar’s business practices violated unfair competition and deceptive trade practice laws; (ii) TrueCar acts as a dealer and broker in car sales transactions without proper licensing, in violation of various States’ laws that govern car sales; and (iii) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times,” it continued.

The news release goes on to note two other separate actions filed against the company this year, referencing a complaint filed by an auto dealer law firm in the Federal Court for the Southern District of New York in March and legal action in May taken by the California New Car Dealers Association for what the association claims are violations of sections of the California Vehicle Code governing dealer licensing, brokering, advertising and disclosure.

“On March 9, 2015, a complaint was filed in Federal Court against TrueCar alleging that car dealers were injured by the Company’s business practices which violated unfair competition and deceptive trade practice laws,” the law firm explains. “Another lawsuit was filed on May 20, 2015 against TrueCar alleging that TrueCar violates various laws that govern car sales in the State of California including claims that TrueCar acts as a dealer and broker in car sales transactions without proper licensing. On the news, shares of TrueCar declined to close at $13.99.”

The statement adds: “Plaintiff seeks to recover damages on behalf of all TrueCar, Inc. shareholders who purchased common stock during the Class Period and are therefore a member of the Class as described above.”

TrueCar released a statement Thursday on the matter, prior to Federman & Sherwood’s news release Friday but after the filing on Wednesday.

The company said it plans to “vigorously defend against the claims made in a putative securities class action lawsuit filed yesterday against the company and two of its officers in the United States District Court for the Central District of California.” 

TrueCar said: “The complaint is based, in large part, on allegations in two separate lawsuits that the company is currently defending in other forums. TrueCar’s management team has reviewed the complaint, and believes the allegations are meritless,” the company said.

TrueCar chief risk officer Johnny Stephenson added: “Disruptive technology and business models like Uber, Airbnb, and now TrueCar, have been challenged on many fronts, including legal. It is an unfortunate and unavoidable byproduct of innovation, but it will not distract our focus away from developing products and services that improve the car-buying experience for consumers and our nearly 11,000 Dealer Partners.”