Investors of Netflix have slammed the streaming company with a lawsuit in a U.S. court over the accusation that the platform is misleading its shareholder market about its subscriber growth. 

Filed in U.S. District Court, Northern District of California, the lawsuit claims that Netflix violated laws by making “materially false and/or misleading statements” and by failing “to disclose material adverse facts about the company’s business, operations and prospects.”

The lawsuit seeks damages of shareholders who possessed shares between the time period of Oct. 19, 2021, and April 19, 2022. 

Due to the company’s “wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” according to the lawsuit.

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The lawsuit was filed by an investment trust and accused Netflix of not revealing that it was experiencing a drop in subscribers. 

Naming executives like Reed Hastings, Ted Sarandos and Chief Financial Officer Spencer Neumann, the lawsuit alleges that they “employed devices, schemes and artifices to defraud [investors], while in possession of material adverse non-public information.”

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The top executives also made “untrue statements of material facts and/or omitting to state material facts necessary in order to make the statements made about Netflix and its business operations and future prospects in light of the circumstances under which they were made not misleading,” the lawsuit reads. 

Also Read: Netflix reports subscriber loss first time in a decade in Q1 of 2022

In January, Netflix shares saw a steep 20% drop after the disclosure of its subscriber growth. 

In April, the streaming company lost 200,000 subscribers in its first quarter with shares plunging over 35%. It failed to reach the goal of adding 2.5 million subscribers.

On Wednesday, the shares were trading at $199.87.