C3.ai Class Action Lawsuit: Reckstin and Liggett Cases

Shareholders have filed two separate securities class action lawsuits against C3.ai in the U.S. District Court for the Northern District of California. The first, filed in March 2022, alleges the enterprise AI company misled investors about its Baker Hughes partnership and business prospects around its December 2020 IPO. The second, filed in August 2025, alleges executives downplayed how CEO Thomas Siebel’s health problems would affect the company’s ability to close deals. As of mid-2026, both cases remain active, with no settlements and no trial dates set.

The 2022 Case: Reckstin Family Trust v. C3.ai

The Reckstin Family Trust filed suit on March 4, 2022, case number 4:22-cv-01413-HSG, assigned to Judge Haywood S. Gilliam, Jr. Hagens Berman Sobol Shapiro LLP serves as lead counsel. The class period runs from December 9, 2020 — the date of C3.ai’s IPO — through December 2, 2021.¹

What Shareholders Alleged

The complaint brought claims under both the Securities Act of 1933 (Sections 11 and 15, tied to the IPO registration statement) and the Securities Exchange Act of 1934.² Plaintiffs accused C3.ai of misleading investors in several ways:

The relationship with Baker Hughes, described publicly as a core growth driver, was actually deteriorating, and C3.ai used what plaintiffs called “problematic financial reporting” around the joint venture to obscure that.²
The company concealed difficulty getting customers to adopt its products and significant salesforce turnover, making Wall Street estimates unlikely to be met.²
C3.ai exaggerated its total addressable market, its market growth, its technology investment, the scale of its partnerships with Microsoft, Google Cloud, and Amazon Web Services, and the descriptions of its customer base.²

The complaint drew on a February 16, 2022, report from short-seller Spruce Point Capital Management titled “Real Intelligence: Sell C3.ai.” Spruce Point issued a “Strong Sell” opinion, estimating 40% to 50% downside, and flagged near-impossible gross margins on Baker Hughes revenue, three CFO changes since the September 2020 registration filing, and sales cycles it said ran 18 to 24 months rather than the 4.5 months cited by the CEO.³

The original complaint named C3.ai, CEO Thomas M. Siebel, and then-CFO David Barter as Exchange Act defendants. The Section 11 claims also named directors who signed or authorized the IPO registration statement, including Patricia A. House, Richard Levin, Condoleezza Rice, Bruce Sewell, and Lorenzo Simonelli, among others.²

What Remains of the Case

The lawsuit has been narrowed substantially. In February 2024, the court dismissed most claims but allowed one Section 11 claim to move forward and dismissed all claims against Baker Hughes, which had been named over its status as a minority investor.⁴

On March 12, 2026, Judge Gilliam ruled on the motion to dismiss the Third Amended Complaint. He dismissed all Exchange Act claims with prejudice, including allegations of intentionally misleading statements and insider trading by current and former executives.⁵ What survives is narrow: Sections 11 and 15 claims tied to a single sentence in the IPO registration statement about revenue recognition on Baker Hughes deals in fiscal year 2020. The statement reads: “During the fiscal year ended April 30, 2020, we recognized as revenue the full value of the first year of the direct subscription agreement and the value of deals brought in by Baker Hughes through the reseller arrangement.” C3.ai maintains the statement is consistent with financials reported in its 2022 Form 10-K.⁶

Defendants filed their answer to the Third Amended Complaint on April 9, 2026. The case has entered fact discovery, with document production and depositions scheduled through the summer and fall of 2026. Plaintiffs plan to seek class certification in November 2026. No settlement has been reached and no trial date has been set.¹

The 2025 Case: Liggett v. C3.ai

The second securities class action was filed on August 22, 2025, in the same district. Styled Liggett Sr. v. C3.ai, Inc., et al., case number 3:25-cv-07129, it covers a class period of February 26, 2025, through August 8, 2025.⁷⁸⁹

The Health Disclosure Allegations

According to the complaint, in February 2025 Siebel disclosed that he had an autoimmune disease causing “significant vision impairment” but told investors he remained fully capable of running the business.⁷ Plaintiffs allege the company’s revenue and growth projections depended too heavily on Siebel’s personal involvement in the sales process, and that defendants downplayed the risk his health posed to closing deals and meeting financial targets.¹⁰

On August 8, 2025, C3.ai reported disappointing quarterly results and cut full-year revenue guidance. Siebel attributed the results to leadership reorganization and his own health, saying his inability to participate in the sales process had a “greater impact than I previously thought.” The stock dropped more than 25% after that disclosure.⁷

Where the Case Stands

The Liggett case is still in its early stages. The October 21, 2025, lead plaintiff deadline has passed, but no lead plaintiff has been appointed. Competing motions remain pending before Judge Trina L. Thompson. Once a lead plaintiff is selected, a consolidated or amended complaint is due 21 days later. The court has set a class certification hearing for September 29, 2026, and referred the matter to private alternative dispute resolution to be completed by July 1, 2026.¹¹

How the Two Cases Relate

Reckstin and Liggett cover different time periods, different facts, and different legal theories. Reckstin (2022) turns on alleged misstatements around the IPO and the Baker Hughes partnership. Liggett (2025) turns on alleged misstatements about Siebel’s health and its effect on sales performance. According to C3.ai’s SEC filings, the two securities class actions remain distinct proceedings, though a court order has related them. Shareholder derivative lawsuits filed alongside each case have been consolidated with other derivative actions.¹²

1
Hagens Berman. Reckstin Family Trust v. C3.ai Case Page
2
ClassAction.org. Reckstin Family Trust v. C3.ai Complaint
3
Nasdaq. Spruce Point Capital Management Announces Investment Opinion on C3.ai
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Bloomberg Law. Developer C3 AI Trims Stockholder Claims; Baker Hughes Beats All
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Yahoo Finance. Court Trims C3 AI Lawsuit
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Stock Titan. C3.ai Inc. Reports Material Event
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D&O Diary. What Do You Say When the CEO Is Sick?
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Levi & Korsinsky. C3.ai Securities Class Action Lawsuit Updates
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D&O Diary. Liggett v. C3.ai Complaint
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BusinessWire. Investors Allege Misleading Statements in C3.ai Class Action Lawsuit
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CourtListener. Liggett Sr. v. C3 AI, Inc. Docket
12
SEC. C3.ai Legal Proceedings Disclosure