Officers and directors of Square and Cash App parent company Block Inc. face a shareholder derivative complaint over alleged anti-money laundering compliance failures weeks after the company reached an $80 million settlement of related claims with state banking regulators.
In a complaint filed Wednesday in California federal court, Block investor Viraj Patel took aim at thecompany's brass, including Twitter co-founder Jack Dorsey, with claims they breached their fiduciary duties by concealing Block's allegedly lax customer due diligence practices, leaving the company vulnerable to regulatory scrutiny and litigation.
By failing to put adequate safeguards in place, Patel said, Block "allowed the company to become a haven for unlawful activities" such as money laundering, trafficking of people and drugs, and terrorism financing, among other things.