Second Circuit Affirms Dismissal of Securities Claims Against Mobileye

Davis Polk represented Mobileye Global Inc. and several current and former senior officers in the appeal before the United States Court of Appeals for the Second Circuit. On December 16, 2025, the Second Circuit affirmed the Southern District of New York’s dismissal with prejudice of all claims in a putative securities class action against Mobileye and several current and former senior officers. The amended complaint alleged securities fraud under the Securities Exchange Act of 1934 and the Securities Act of 1933 in connection with a purported "channel-stuffing" scheme and challenged statements about demand for Mobileye’s EyeQ chips and related disclosures concerning minimum-commitment contracts. Mobileye, an Israeli technology company that sells advanced driver-assistance systems (ADAS), supplies its EyeQ chip to Tier 1 automotive equipment suppliers, which incorporate Mobileye products into equipment sold to original equipment manufacturers. In early 2024 Mobileye announced that certain Tier 1 customers had accrued excess EyeQ chips, materially exceeding prior estimates and prompting lower revenue projections for the first quarter of 2024. Following a decline in Mobileye’s stock price, plaintiffs alleged the company had engaged in an undisclosed scheme to accelerate sales of excess chips to boost current revenue at the expense of future revenue and that disclosures and executive statements had misled investors about the relationship between Tier 1 purchases and actual demand. Mobileye moved to dismiss and Judge Denise L. Cote granted the motion, finding that the amended complaint failed to plead material misrepresentations, omissions, or other deceptive acts in light of the company’s disclosures. The Second Circuit affirmed in full, concluding that Mobileye’s public disclosures, including its Form 10-Ks describing minimum-commitment contracts, prior customer inventory accruals and associated risks, rendered the challenged statements neither false nor misleading. The panel also held that the remaining contested statements concerning demand stabilization, performance metrics, market share and customer capacity were inactionable—because they were accurate in context, constituted forward-looking statements or opinions, or otherwise were not misleading. The court likewise rejected claims of scheme liability and alleged violations of Section 11 of the Securities Act. Davis Polk represented Mobileye Global Inc. and several current and former senior officers with a team composed by: partner Dana M. Seshens (who argued the appeal), counsel Daniel J. Schwartz, and associates Tess Liegeois, Allie (Allison) Siesser, Matthew J. Whang and George Palau. All members of the Davis Polk team are based in the New York office.

Second Circuit Affirms Dismissal of Securities Claims Against Mobileye

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