Dive Brief:

• Fiserv asked a federal court on Tuesday to dismiss a shareholder class action lawsuit related to the steep decline of its share price last year, saying that plaintiffs had identified no securities fraud at the payments processor. 
• “This kind of knee-jerk filing of a securities fraud lawsuit ‘whenever there is a significant change in an issuer’s stock price, without regard to any underlying culpability of the issuer’ is precisely what Congress intended to curb” with the Private Securities Litigation Reform Act, Fiserv’s attorneys wrote in their motion to dismiss the lawsuit, citing a 2019 federal appeals court decision.
• The motion is in response to the plaintiffs’ revised complaint, filed in June, which incorporated a fourth former Fiserv executive as a defendant and added as a plaintiff a pension plan for retired employees of Pontiac, Michigan.

Dive Insight:

“This securities fraud class action is exactly the kind of lawsuit that the PSLRA was designed to stop,” Fiserv and four former executives named as defendants wrote in their motion. 

The defendants also summarized their main arguments Tuesday in a three-page letter to U.S. District Judge Jennifer H. Rearden, who is overseeing the case. 

The litigation in federal court in New York City dates to July 2025 and includes two shareholder complaints filed against Fiserv last year in Wisconsin. In April, a federal judge in Milwaukee combined that litigation with the New York case.

The lawsuit aims to represent Fiserv shareholders during a class period from Feb. 6, 2024 to Oct. 28, 2025. Fiserv stock declined 73% during that period, erasing $92 billion in market capitalization, according to the complaint.

The plaintiffs are led by Ethenea Independent Investors SA of Luxembourg, an investment firm, and the City of Hollywood Police Officers’ Retirement System. The pension fund for Miami Beach, Florida police officers and firefighters is also a plaintiff.

The revised complaint added the City of Pontiac Reestablished General Employees’ Retirement System as a plaintiff and named a fourth individual defendant, John Gibbons, the former head of Fiserv’s Financial Institutions Group.

Former Fiserv CEOs Frank Bisignano and Mike Lyons are also defendants, along with Bob Hau, the former chief financial officer. 

Shareholders allege that the company “padded” the results of its Clover payment platform and “misleadingly portrayed Fiserv’s financial results to enrich themselves.” 

With Fiserv’s earnings release in October, Lyons announced a financial and operational “reset” that led to a 44% stock price decline that day, causing a $29 billion loss in market capitalization. Plaintiffs allege that decline, and several others in the preceding months, was investors’ realization that Fiserv’s prior financial statements were not truthful.

However, the “non-fraudulent inference” of Fiserv’s October reset is that “Lyons was new to Fiserv, was getting up to speed, and made a business decision to implement a new direction for the company” and a “far more compelling” scenario for the situation, the defendants wrote in their motion.

“At bottom, Plaintiffs do not even offer any theory that Defendants ‘should have known’ of some inaccuracy in their statements, but instead rely on the untenable theory that Fiserv should have disclosed different metrics or different facts,” the defendants wrote.

The Milwaukee-based company also exploited “an unsustainable hyperinflationary environment in Argentina” to create a “misleading appearance that Fiserv’s revenue was growing exponentially,” according to the lawsuit.

“Unbeknownst to investors, Defendants replaced the drivers of Fiserv’s ostensible success with an undisclosed battery of temporary cash grabs,” the shareholders wrote in their revised complaint. 

Among those efforts was a “forced” migration of merchants from Fiserv’s older Payeezy payment platform to the newer Clover system, the plaintiffs contend. “These practices temporarily inflated Fiserv’s reported financial results but ultimately alienated merchants and drove many customers away from Fiserv altogether,” the lawsuit said.

Bisignano left Fiserv last year when he was confirmed by the Senate to lead the Social Security Administration, while Lyons resigned in June to lead Truist Financial. 

In October, the Trump administration also tapped Bisignano to serve as chief executive officer of the IRS. Gibbons is now chief of staff at the Internal Revenue Service, according to his LinkedIn page. 

Bisignano was required to sell his Fiserv shares because of a February 2025 ethics agreement after he was nominated for the Social Security Administration role, the motion said. That agreement gave him 120 days after his confirmation to divest the shares.