PayPal is currently defending two active class action lawsuits: a securities fraud case brought by shareholders after the stock lost roughly 20% of its value in a single day in February 2026, and an antitrust case brought by consumers over the merchant pricing rules PayPal imposes on retailers. Neither case has produced a settlement or payout. A separate $30 million agreement with the U.S. Department of Justice, sometimes described as a class action, is a government enforcement settlement, not a consumer or investor case.
The Securities Fraud Case Filed in 2026
The biggest active case is a securities fraud class action in the U.S. District Court for the Northern District of California. Three related complaints have been filed so far:
- Goodman v. PayPal Holdings, Inc., No. 26-cv-01381, filed February 17, 2026.
- Darcy v. PayPal Holdings, Inc., No. 26-cv-01589, filed February 24, 2026.
- Norfolk County Retirement System v. PayPal Holdings, Inc., No. 26-cv-02849, filed April 2, 2026, with an expanded complaint building on the first two.
The defendants are PayPal itself and several current and former executives: former CEO James Alexander Chriss, CFO and COO Jamie S. Miller, EVP Diego Scotti, and EVP Frank Keller. The claims are brought under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
What Investors Are Alleging
The complaints focus on PayPal’s “branded checkout” business, the core product that lets shoppers pay with the PayPal button on merchant websites. Throughout 2024 and 2025, executives told investors the company had made major improvements to branded checkout and that those improvements would drive sustainable growth. Management also promoted financial targets for 2027, including high single-digit transaction margin growth and non-GAAP earnings-per-share growth above 20%.
According to the lawsuits, those statements were misleading. Branded checkout was actually struggling across all regions. Product deployments in the second half of 2025 were behind schedule. Large merchants needed far more hands-on integration support than management had planned for, and the sales force was not equipped to deliver the promised numbers. The 2027 targets, the complaints say, were not realistic.
The February 2026 Stock Drop
On February 3, 2026, PayPal reported fourth-quarter and full-year 2025 results that missed Wall Street expectations. Q4 revenue was $8.68 billion against estimates of $8.78 billion, and adjusted earnings per share came in at $1.23 versus $1.29 expected.
The branded checkout number was worse. Total payment volume in that segment grew just 1% on a currency-neutral basis, down sharply from 5% growth the prior quarter. The company withdrew its 2027 financial targets and announced the abrupt departure of CEO Alex Chriss. Interim CEO Jamie Miller told analysts on the earnings call that “execution has not been where it needs to be, particularly in branded checkout.”
PayPal shares fell from $52.33 on February 2 to $41.70 on February 3, a drop of roughly 20% that erased more than $9 billion in market value.
Who Is Covered and What to Do
The earliest complaint defines the class as investors who bought PayPal stock between February 25, 2025, and February 2, 2026. The expanded Norfolk County complaint pushes the class period back to February 8, 2024, capturing a longer stretch of the statements at issue.
If you bought PayPal common stock during either window, you are automatically a potential class member. You do not need to file anything now. The deadline to apply for lead plaintiff status was April 20, 2026, and has passed. The court has not yet appointed a lead plaintiff, consolidated the related cases, or certified a class. No settlement exists, and there is no claims process to join. If the case ever settles or goes to judgment, class members will get formal notice with instructions on how to file a claim.
The Antitrust Case Over Merchant Pricing Rules
The other active class action, Sabol v. PayPal Holdings, Inc., Case No. 5:23-cv-05100, was filed in October 2023 in the same Northern District of California court. This one is brought on behalf of consumers rather than investors.
The complaint targets what the plaintiffs call anti-steering rules in PayPal’s merchant agreements. Under those rules, retailers cannot offer discounts to customers who pick a cheaper payment method, cannot tell customers that another payment method is preferred, and cannot display competing payment options more prominently than PayPal or Venmo at checkout. The plaintiffs argue these restrictions let PayPal keep processing fees high, and that merchants pass those fees along by inflating retail prices for all shoppers, including those who never use PayPal.
The case has survived two motions to dismiss but has been narrowed each time. In August 2024, Judge Jeffrey S. White dismissed the original complaint, finding the plaintiffs’ claims “too indirect and speculative to maintain antitrust standing,” and gave them a chance to amend. They filed a revised complaint in October 2024.
On November 5, 2025, Judge White ruled on the amended version. He dismissed the Sherman Act antitrust claim, finding the plaintiffs had not shown a direct enough link between PayPal’s rules and inflated prices and had not adequately demonstrated PayPal’s market power. He did accept the plaintiffs’ definition of an “e-commerce retail market” as plausible and gave them one more opportunity to amend the Sherman Act claim. The state-law claims were dismissed without prejudice for lack of jurisdiction after the federal claim fell out.
The case is still active. No class has been certified, and no settlement is on the table.
The 2022 Investor Case Was Dismissed
An earlier PayPal securities class action is sometimes confused with the current one, but it is over. In In re PayPal Holdings, Inc. Securities Litigation, Case No. 4:22-cv-04029 (N.D. Cal.), investors alleged that PayPal inflated its “Net New Active” account numbers through promotional campaigns that attracted bot accounts and users who signed up only for cash incentives. The complaint said roughly 4.5 million accounts across the first three quarters of 2021 were illegitimate or tied to incentive abuse.
Judge Haywood S. Gilliam Jr. dismissed the original complaint in September 2023 and dismissed the amended complaint with prejudice on March 29, 2024. That ruling ended the case, and the plaintiffs cannot refile. If you held PayPal stock in 2021, there is no active claim tied to those allegations.
The DOJ Settlement Is Not a Class Action
On May 12, 2026, the Department of Justice announced a settlement with PayPal over the Economic Opportunity Fund, a $530 million program PayPal launched in 2020 to invest in Black and minority-owned businesses. The DOJ alleged the program violated the Equal Credit Opportunity Act by using race, color, and national origin as criteria without being tied to specific past discrimination.
PayPal agreed to waive processing fees on $1 billion in small business transactions, a concession valued at about $30 million, and to replace the program with a new Small Business Initiative aimed at veteran-owned businesses and those in farming, manufacturing, or technology. The company admitted no wrongdoing and paid no fine. Because this is a government enforcement settlement, there are no individual class members and no claims process for the public. Consumers and merchants are not eligible to collect anything from it.