A verified stockholder derivative complaint filed August 21, 2026 alleges that certain current and former Block, Inc. (“Block” or the “Company”) (NYSE: XYZ) directors and officers failed to adequately oversee compliance risks involving Cash App and harmed the Company.

The action, Iron Workers Local Union No. 401 v. Dorsey, et al., Case No. 4:26-cv-08765, was filed in the U.S. District Court for the Northern District of California derivatively on behalf of Block against certain current and former directors and executive officers. Block is named as the nominal defendant.

What Claims and Relief Are Asserted?

The complaint asserts claims for breach of fiduciary duty and corporate waste, as well as alleged violations of Sections 14(a), 10(b), and 20(a) of the Securities Exchange Act of 1934.

On behalf of Block, the plaintiff seeks damages, restitution and disgorgement, and corporate-governance and internal-procedure reforms. The requested reforms include measures intended to prevent and remedy practices that violate federal and state consumer-protection and securities laws and additional audit, compliance, and internal-control procedures.

What Does the Complaint Allege?

The complaint alleges that, from at least 2019 through 2024, Block fiduciaries prioritized Cash App growth over compliance and either failed to adequately oversee compliance or caused Block to engage in allegedly unlawful conduct. Specifically, the complaint alleges that:

• Cash App was designed to make signup and use easy, including through minimal identity-verification requirements, and Block fiduciaries allegedly chose to reduce user “friction” rather than implement compliance measures that could slow user acquisition.
• Block became subject to regulatory actions, fines, civil litigation, and other consequences that the complaint attributes to alleged Cash App compliance failures.
• Certain directors and officers allegedly made or allowed false or misleading statements concerning Block’s compliance practices, risk oversight, and Cash App user metrics.
• Certain insiders allegedly sold more than $1.2 billion of Block stock while possessing material nonpublic information concerning the Company’s compliance regime and changing growth metrics.
• The complaint alleges that false or misleading public statements caused Block to repurchase its own stock at inflated prices, further harming the Company.

Regulatory Actions Cited in the Complaint

The complaint cites several 2025 regulatory matters as part of its allegations concerning harm to Block, including:

• A January 2025 Consumer Financial Protection Bureau order requiring Block to pay at least $75 million and up to $120 million in consumer redress, plus a $55 million civil penalty, and to implement specified changes to its practices;
• A January 2025 multistate settlement with state money-transmission regulators requiring an $80 million penalty and compliance measures, including an independent review of Block’s anti-money-laundering program; and
• An April 2025 New York State Department of Financial Services consent order imposing a $40 million civil monetary penalty and requiring an independent monitor to assess Block’s remediation and compliance program.

Review a copy of the Block Verified Stockholder Derivative Complaint.

What Is a Stockholder Derivative Action — and Why Does It Matter?

A stockholder derivative action is brought by a stockholder on behalf of the corporation to pursue claims that allegedly belong to the company. Unlike a securities class action seeking direct damages for investors, a derivative action can seek relief for the corporation itself, which can be significant to stockholders. In this case, the complaint seeks monetary recovery for Block as well as reforms to the Company’s governance, compliance, audit, and internal-control procedures designed to protect Block and its stockholders from a recurrence of the alleged misconduct.

Why Should Stockholders Come Forward?

Stockholders can play an important role in derivative litigation by seeking accountability for alleged misconduct and pursuing relief intended to benefit the company. A stockholder serving as a derivative plaintiff acts on behalf of the corporation rather than simply seeking an individual damages payment.

Here, the complaint asks the court to award damages to Block, require restitution and disgorgement from the individual defendants, and direct Block to improve its corporate governance and internal procedures, including additional audit, compliance, and internal-control measures. These forms of relief are intended to benefit the Company and its stockholders by seeking to restore corporate value and strengthen protections against future misconduct.

Block Stockholders: Questions About the Derivative Action?

If you are a current Block stockholder and have questions about the derivative action, your rights as a stockholder, or the role a stockholder may play in derivative litigation, Kehoe Law Firm, P.C. is available to discuss the case and evaluate your circumstances.

For a free, no-obligation legal evaluation, send us a message or contact:

Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

There is no cost or obligation to speak with the firm, and there are no upfront fees or litigation costs. We handle class action matters on a contingency-fee basis. Any attorneys’ fees or expenses sought in connection with a recovery are subject to court approval.

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