Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—S.D.N.Y.: Israeli company’s self-description as a tech company was not misleading, (Sep 10, 2026)

By Kristin J. Angelino, J.D.

Plaintiffs’ complaint failed to sufficiently allege that defendants misrepresented or omitted key details about the company’s business in its offering materials.

The district court in the Southern District of New York granted defendants’ motion to dismiss fraud claims brought against Oddity Tech Ltd., certain of its employees, and various underwriters for Oddity’s two IPOs. In granting the motion to dismiss, the court held that plaintiffs’ second amended complaint failed to show that Oddity’s SEC disclosure documents made material misrepresentations or omitted key details about the existence of the company’s brick-and-mortar operations, its revenue drivers, and pending lawsuits (Hoare v. Oddity Tech Ltd., No. 1:24-cv-06571 (S.D.N.Y. Sep. 9, 2026)).

Oddity Tech Ltd., an Israeli company, was founded in 2013. That same year, Oddity acquired a U.S.-based makeup company called Il Makiage, which sells beauty products under its brands in 43 countries and operates approximately seven brick-and-mortar makeup stores and beauty schools in Israel. Subsequent to acquiring Il Makiage, Oddity rebranded its business several times and, in 2019, began referring to itself as a “technology company” while seeking to expand its technological capabilities.

Shareholders brought fraud claims against Oddity and certain of its employees and underwriters, alleging violations of Securities Act Sections 11 and 15, and Exchange Act Sections 10(b) and 20(a), and SEC Rule 10b-5 thereunder. Plaintiffs alleged that defendants made material misstatements or omissions in their offering materials regarding: (1) the existence of Il Makiage’s brick-and-mortar operations; (2) Oddity’s identity as a technology company and the drivers of its revenue; and (3) pending lawsuits against Oddity and its subsidiaries in the United States and Israel.

Brick-and-mortar operations. Plaintiffs second amended complaint (the SAC) argued that Oddity’s failure to disclose the existence of Il Makiage’s retail stores and beauty schools in Israel was a material omission. The court disagreed, holding that the existence of Il Makiage’s in-person operations was publicly available information that was easily accessible to any investor and, therefore, defendants had no duty to disclose it.

Self-described tech company. Plaintiffs included “uninterrupted and consecutive block quotes” from Oddity’s registration documents to argue that defendants’ numerous references to “AI” and the company’s “digital platform” were misleading because such references indicate that Oddity’s sales were primarily the results of its AI and proprietary technology use as opposed to the company’s conventional marketing, advertising, and subscription sales. The court disagreed, holding that, first, it is plaintiffs’ burden to identify the alleged false statements with specificity, and “page-long block quotes” do not suffice. Second, none of the quotes stated that Oddity's revenue derived “exclusively or even primarily” from its technology use. Third, the court noted that the registration documents clearly disclosed that Oddity invests in “performance marketing” and that its business would be “adversely affected” if its marketing efforts were unsuccessful.

Plaintiffs also included the statements of several confidential witnesses (CWs) to argue that Oddity was simply a traditional retailer with an online presence. Again, the court disagreed, holding that plaintiffs never squarely identified a misrepresentation in the registration documents. The court also held that plaintiffs failed to allege that the CWs held positions that would have given them insights into Oddity’s technological capabilities or that the CWs provided statements showing that Oddity lacked its advertised technological capabilities. Lastly, the court held that many of the statements offered by plaintiffs were inactionable puffery or forward-looking opinions that conveyed “no meaningful, objective data that an investor would rely upon.”

Pending lawsuits. Plaintiffs further alleged that Oddity failed to disclose legal actions pending against the company and its subsidiaries in the United States and Israel. The court again disagreed, citing statements from the offering documents such as “Oddity is ‘currently involved in, and may in the future be involved in, legal proceedings’” to hold that defendants adequately disclosed that Oddity was facing litigation.

The court disagreed with plaintiffs’ allegations that these statements were overly vague and that Oddity should have detailed each of the “relatively minor” lawsuits described in the offering documents, stating that federal securities law imposed no such requirement. Furthermore, the court held that information about the filed lawsuits was publicly accessible; therefore, Oddity had no duty to disclose it and, even if it did, the nature and number of claims would not be material to an investor. The court added that all of the cited lawsuits were “run-of-the-mill suits common to any large retail business operating globally.”

The case is No. 1:24-cv-06571.

Judge: Garnett, M.

Attorneys: J Alexander Hood (Pomerantz LLP) for Brian Hoare. Lauren Michelle Rosenberg (Cravath, Swaine & Moore LLP) for Oddity Tech Ltd.

Companies: Oddity Tech Ltd.

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