Collectibles manufacturer Funko has agreed to pay more than US$2.1 million to resolve class-action lawsuits in California and Delaware alleging that the company misled shareholders and the public. 

Plaintiffs filed the securities fraud cases last year, claiming that the toyco’s leadership team headed by former CEO Brian Mariotti failed to disclose information about 28 separate issues affecting Funko’s operations between May 6, 2022 and March 1, 2023 (including inventory management, the write-off of slower-moving products, two infrastructure project delays and lower-than-expected sales figures), resulting in Funko’s stock being artificially inflated. 

Shareholders have until October 17 to object to the settlement, and the court has scheduled a hearing for November 15 to hopefully confirm the final terms of the deal. If approved, each plaintiff will be awarded US$2,500. Funko has also agreed to implement new corporate governance measures to improve its relationship with investors by rebuilding trust. 

Earlier in May, Funko won a motion to dismiss a proposed class-action lawsuit in Washington, where it faced the same claims. The federal judge ruled that a majority of the toyco’s statements were classified as forward-looking statements, and that the plaintiffs had failed to provide enough evidence that company leadership had falsified information.