July 24, 2026  ·  Complaint filed July 23, 2026  ·  United States District Court for the Southern District of New York, No. 1:26-cv-06288

By David Brunk, civil litigation attorney

Read the complaint

Parra v. EquipmentShare Tests Whether IPO Filings Hid $77M in Founder Deals

Undisclosed Related-Party Transactions Allegedly Inflated Stock Price

On July 23, 2026, Jupiter Parra, a purchaser of EquipmentShare.com Inc. securities, filed a class action complaint alleging that the company and its executives failed to disclose material related-party transactions with entities controlled by its co-founders, Jabbok and William Schlacks. The complaint asserts that these omissions and misrepresentations violated federal securities laws, artificially inflating the company’s stock price during the class period. “EquipmentShare’s securities traded at artificially inflated prices during the Class Period,” the complaint alleges in paragraph 78. The filing further contends that “materially false and/or misleading statements... resulted in Plaintiff and other members of the Class purchasing the Company’s securities at artificially inflated prices” (Compl. ¶80).

The complaint alleges that EquipmentShare’s total revenue for the fiscal year 2025 reached $4,379 million, with accounts receivable, net, totaling $748 million, including $20 million and $36.3 million due from related parties as of December 31, 2024 (Compl. ¶56). Despite these substantial figures, the complaint claims that the company’s financial disclosures omitted critical details about its dealings with entities affiliated with its founders. Operating lease liabilities, net, amounted to $655 million, with $5 million and $29 million due to related parties as of December 31, 2025 (Compl. ¶56). The complaint also highlights that the company's equipment sales revenue from related parties totaled $346 million in FY2024 and $196 million in FY2023, figures that were not prominently disclosed in the company's public filings (Compl. ¶18).

Hundreds of Millions in Undisclosed Transactions

The complaint details transactions reported in EquipmentShare’s filings, including:

• $276.6 million in equipment sales to related parties for the year ended December 31, 2024, representing a significant portion of the company’s equipment sales, which totaled $1,541 million for that year. Of this, $79 million, $277 million, and $80 million were sales to related parties for 2025, 2024, and 2023, respectively (Compl. ¶57). The complaint further specifies that equipment sales to related parties amounted to $128 million in FY2025 and $346 million in FY2024 (Compl. ¶18).
• $133.1 million in equipment purchases from related parties for the same period, with $112.3 million occurring in the nine months ended September 30, 2024 (Compl. ¶57).
• $78.7 million in equipment sales to related parties for the nine months ended September 30, 2025, and $219.5 million for the nine months ended September 30, 2024 (Compl. ¶57).
• $21.9 million in equipment purchases from related parties for the nine months ended September 30, 2025.
• $73.5 million in revenue-sharing payouts to related parties under the OWN Program for the year ended December 31, 2024, representing 16% of total OWN Program payouts. For the nine months ended September 30, 2025, OWN Program payouts to related parties totaled $45.2 million (Compl. ¶57).
• Other income, net, totaled $49 million for the year ended December 31, 2024, with $9 million and $6 million derived from related parties in 2025 and 2024, respectively (Compl. ¶57).

The OWN Program paid out $74 million to related parties in FY2024, representing 16% of total payouts, and $40 million in FY2025, representing 6% of total payouts. The complaint also highlights that EquipmentShare’s fleet was valued at $2.8 billion, a figure that underscores the scale of the company’s operations and the potential impact of the alleged undisclosed transactions (Compl. ¶29). Additionally, the complaint alleges that entities affiliated with the founders netted $77 million through these undisclosed related-party transactions (Compl. ¶29). The complaint further notes that as of September 30, 2025, receivables due from related parties totaled $24.2 million (Compl. ¶57).

Third-Party Report Exposes Alleged Scheme

The complaint relies heavily on a report published by Umibōzu Research on June 23, 2026, which allegedly exposed the extent of the related-party transactions. According to the complaint, the report revealed that:

• A co-founder-controlled entity, Premiere, made approximately $35 million in profits from buying and flipping 49 EquipmentShare properties at steep mark-ups. The complaint alleges that these transactions were not fully disclosed to investors, masking the true financial dynamics between the company and its founders (Compl. ¶29). The report also noted that Premiere had captured an estimated $35 million in profits from these transactions, based on 20 of the 32 transactions for which price data was available. The complaint states that “Premiere made ~$35 million from buying and flipping 49 EQPT properties at steep mark-ups” (Compl. ¶29).
• Armada Fleet Management, another co-founder-controlled entity, captured an estimated $18 million in fees since the fourth quarter of 2024 through tranche purchases of EquipmentShare assets, ranging from $20 million to $100 million at a time. Armada’s claimed demand for fleet at the end of 2024 and 2025 was $400 million, and its expected allocation in June 2026 was projected to be between $100-$200 million (Compl. ¶29). The complaint further alleges that Armada's purchases represented a significant portion of EquipmentShare’s equipment sales revenue, which totaled $179 million in the first quarter of 2026 (Compl. ¶56). For the three months ended March 31, 2025, the cost of equipment sold was $42 million (Compl. ¶57).
• EquipmentShare transferred a California property site, purchased for $4.7 million, to Premiere for no consideration, a transaction that the complaint alleges was not adequately disclosed to shareholders. The complaint states that this transfer was part of a broader pattern of self-dealing that included at least 130 Schlacks-affiliated entities. “Defendants acted with scienter since Defendants knew that the public documents and statements... were materially false and/or misleading,” the complaint alleges (Compl. ¶83). The filing further contends that the defendants “engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company’s securities” (Compl. ¶106).
• Bevel Financial, a co-founder-affiliated financing entity, collected an estimated $24 million in fees from assets enrolled in its platform alone, which had $2.8 billion in assets enrolled as of January 1, 2026 (Compl. ¶29). The complaint notes that Bevel had celebrated $1 billion in total funded volume by 2025, further illustrating the scale of these related-party dealings.

The complaint notes that if Armada purchased $20 million in equipment from EquipmentShare in the first quarter of 2026, this would represent approximately 11% of the company’s $179 million in equipment sales revenue for that period.

The complaint provides additional context on the financial impact of these transactions, noting that EquipmentShare’s equipment sales revenue from related parties was $80.2 million for the year ended December 31, 2023 (Compl. ¶57). The complaint also states that the company’s revenue from parts, supplies, and services to related parties was $6.8 million for the year ended December 31, 2023 (Compl. ¶18). The filing further alleges that “Defendants... material misrepresentations and/or omissions were done knowingly or recklessly and for the purpose and effect of concealing EquipmentShare’s financial well-being” (Compl. ¶110). It also alleges that the individual defendants “had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company” (Compl. ¶116).

The complaint also details the company’s financial obligations, including $32 million in finance lease liabilities as of March 31, 2026, and $29 million as of December 31, 2025 (Compl. ¶57). Additionally, the company reported $21 million in cash equivalents held in a money market account as of March 31, 2026, and December 31, 2025 (Compl. ¶57). For the three months ended March 31, 2025, the company reported $42 million in the cost of equipment sold (Compl. ¶57).

Stock Price Collapse Following Disclosure

The complaint alleges that the related-party transactions artificially inflated EquipmentShare’s stock price during the class period, which began on January 23, 2026, the date the company’s common stock began public trading, and ended on June 26, 2026. EquipmentShare’s stock price reached a high of $34.63 per share on January 28, 2026, following its initial public offering of 30.5 million shares at $24.50 per share. The company received net proceeds of $706 million from the IPO (Compl. ¶55).

On June 24, 2026, EquipmentShare’s stock price fell by $1.58, or 6.62%, to close at $22.30 per share on heavy trading volume. The following day, the stock price dropped an additional $2.61, or 11.7%, to close at $19.69 per share. By June 26, 2026, the stock price had reached a low of $16.06 per share, representing a 34.5% decline from the IPO price. The complaint alleges that this decline was directly tied to the revelation of the undisclosed related-party transactions, which included $77 million allegedly netted by entities affiliated with the founders (Compl. ¶29).

“The market price of EquipmentShare’s securities was artificially inflated during the Class Period,” the complaint alleges (Compl. ¶111). The filing further contends that “Plaintiff and other members of the Class would not have purchased or otherwise acquired their EquipmentShare securities... had they known the truth about the Company’s financial condition and the material facts concerning the Company’s related-party transactions” (Compl. ¶112). The complaint also asserts that “positive proof of reliance is not a prerequisite to recovery” under the legal principles established in Affiliated Ute Citizens of Utah v. United States (Compl. ¶88).

Alleged Violations of Federal Securities Laws

The complaint asserts four causes of action under federal securities laws:

• Count I (Section 11 of the Securities Act): The defendants are strictly liable for material misstatements and omissions in the registration statement filed in connection with EquipmentShare’s IPO. The complaint alleges that the registration statement was inaccurate and misleading, failing to disclose the full extent of related-party transactions, including $346 million in equipment sales to related parties in FY2024 and $196 million in FY2023 (Compl. ¶18). The complaint states that the registration statement contained “materially false and misleading statements” and omitted “material facts necessary to make the statements therein not misleading” (Compl. ¶54).
• Count II (Section 15 of the Securities Act): The individual defendants, as controlling persons of EquipmentShare, are liable for the company’s violations of Section 11. The complaint alleges that the individual defendants “had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company” (Compl. ¶116).
• Count III (Section 10(b) of the Exchange Act and Rule 10b-5): The defendants engaged in a scheme to defraud investors by making materially false and misleading statements and omissions in EquipmentShare’s SEC filings and public disclosures. The complaint alleges that the defendants “employed devices, schemes, and artifices to defraud” and “engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company’s securities” (Compl. ¶106). The complaint further alleges that the defendants’ actions were undertaken with scienter, or intent to deceive, as they “knew that the public documents and statements... were materially false and/or misleading” (Compl. ¶83).
• Count IV (Section 20(a) of the Exchange Act): The individual defendants are liable as controlling persons for EquipmentShare’s violations of Section 10(b). The complaint alleges that the individual defendants “had actual knowledge of the material facts which were concealed from Plaintiff and the Class” and “had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company” (Compl. ¶116). The complaint also notes that the company’s equipment sales to related parties were $60 million for the full year 2025 and $128 million for FY2025 (Compl. ¶18).

The complaint alleges that the defendants’ misrepresentations and omissions “directly caused damages to Plaintiff and the Class by creating an unrealistically positive assessment of EquipmentShare’s business, operations, and prospects, thereby inflating the market price of EquipmentShare’s securities” (Compl. ¶80). The filing further contends that the market for EquipmentShare’s securities was efficient, as the company’s shares were listed on NASDAQ, subject to SEC reporting requirements, and followed by analysts, thereby entitling the class to a presumption of reliance under established legal principles. The complaint states that “the market promptly digested all publicly available information and reflected such information in EquipmentShare’s share price,” supporting the application of the fraud-on-the-market theory (Compl. ¶87).

The complaint also details the specific purchases made by the plaintiff, Jupiter Parra, during the class period:

• 105 shares purchased on February 12, 2026, at $32.55 per share.
• 6 shares purchased on February 20, 2026, at $31.94 per share.
• 15 shares purchased on February 27, 2026, at $29.30 per share.
• 2 shares purchased on March 11, 2026, at $28.35 per share.
• 20 shares purchased on March 20, 2026, at $21.53 per share.

The allegations in the complaint are unproven, and no defendant has yet responded to the claims. The case highlights the potential risks associated with undisclosed related-party transactions and the importance of transparency in public company disclosures. The complaint underscores the scale of the alleged transactions, including $346 million in equipment sales to related parties in FY2024, $196 million in FY2023, and $77 million allegedly netted by entities affiliated with the founders through undisclosed dealings (Compl. ¶18, ¶29). The complaint also notes that the company’s receivables due from related parties were $36.3 million as of December 31, 2024, and $24.2 million as of September 30, 2025 (Compl. ¶57).

Financial Projections and Obligations

The complaint provides additional details about EquipmentShare’s financial obligations, which were allegedly obscured by the undisclosed related-party transactions. The complaint also notes that the company’s finance lease liabilities were $32 million as of March 31, 2026, and $29 million as of December 31, 2025 (Compl. ¶57). Additionally, the company reported $21 million in cash equivalents held in a money market account as of both March 31, 2026, and December 31, 2025 (Compl. ¶57).

The complaint further alleges that the company’s equipment sales revenue for the three months ended March 31, 2025, included $42 million in the cost of equipment sold (Compl. ¶57). These figures, according to the complaint, were not adequately disclosed to investors, contributing to the artificial inflation of the company’s stock price.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.