Class Action Lawsuit Filed Against The Trade Desk, Inc.: Allegations of Fraudulent Practices and Generative AI Forecasting Tool Kokai
On Feb. 25, 2025, a significant legal development unfolded in the advertising technology industry when a class action lawsuit was filed against The Trade Desk, Inc. (TTD), a prominent player in the sector. The lawsuit, captioned United Union of Roofers, Waterproofers & Allied Workers Local Union No. 362 v. The Trade Desk, Inc. et al., was filed in the United States District Court for the Northern District of California.
Background on The Trade Desk and Kokai
The Trade Desk, Inc. is a leading technology company that provides a demand-side platform for digital advertising. The platform allows buyers of digital advertising inventory to manage multi-channel digital advertising campaigns in real time. The company’s innovative solutions have earned it a strong reputation in the industry and a market capitalization of over $30 billion as of 2025.
In 2023, The Trade Desk introduced Kokai, a generative artificial intelligence (AI) forecasting tool designed to help users more effectively deploy their advertising spend. Kokai uses advanced machine learning algorithms to analyze historical data and predict future trends, enabling advertisers to optimize their campaigns and achieve better ROI.
Allegations of Fraudulent Practices
The class action lawsuit alleges that The Trade Desk and certain executives engaged in fraudulent practices related to the rollout of Kokai. Specifically, the plaintiffs claim that the company made false and misleading statements regarding the accuracy and reliability of Kokai’s predictions, leading investors to purchase TTD stock based on inaccurate information.
Impact on The Trade Desk and Its Investors
The allegations have sent shockwaves through the advertising technology industry and The Trade Desk’s investor base. The stock price dropped by over 15% in the days following the filing of the lawsuit, erasing billions in market value. The Securities and Exchange Commission (SEC) and other regulatory bodies have reportedly begun investigating the matter.
Impact on Advertisers and the Advertising Industry
The lawsuit has raised concerns among advertisers about the reliability and trustworthiness of AI forecasting tools in general. The Trade Desk’s competitors, such as MediaMath and AppNexus, have reportedly seen increased interest in their own forecasting solutions as a result. The incident may also lead to increased regulatory scrutiny of the advertising technology industry and the use of AI in marketing.
Conclusion
The class action lawsuit against The Trade Desk, Inc. marks a significant moment in the advertising technology industry. The allegations of fraudulent practices related to the company’s Kokai AI forecasting tool have led to substantial financial losses for investors and increased scrutiny of the industry as a whole. As regulatory bodies investigate the matter, advertisers will be closely watching the outcome to determine the impact on their own use of AI forecasting tools.
- A class action lawsuit was filed against The Trade Desk, Inc. on Feb. 25, 2025, alleging fraudulent practices related to the company’s Kokai generative AI forecasting tool.
- The lawsuit claims that The Trade Desk and certain executives made false and misleading statements regarding Kokai’s accuracy and reliability, leading investors to purchase TTD stock based on inaccurate information.
- The allegations have resulted in a significant drop in TTD’s stock price and increased regulatory scrutiny.
- The incident has raised concerns among advertisers about the reliability and trustworthiness of AI forecasting tools and may lead to increased regulatory oversight of the advertising technology industry.
