ENTWISTLE & CAPPUCCI SECURES SIGNIFICANT VICTORY AS COURT DENIES KEY PORTIONS OF DEFENDANTS’ MOTION TO DISMISS IN KNOWBE4 SECURITIES CLASS ACTION; CASE PROCEEDS TO DISCOVERY

December 23, 2025

On December 23, 2025, Entwistle & Cappucci secured a significant victory when the Honorable Cecilia M. Altonaga of the Southern District of Florida issued an order in In re KnowBe4, Inc. Securities Litigation, No. 1:25-cv-22574-CMA (S.D. Fla.), denying the majority of Defendants’ motions to dismiss Plaintiffs’ consolidated amended class action complaint.

Based in Clearwater, Florida, KnowBe4, Inc. (“KnowBe4” or the “Company”) provides the world’s largest security awareness training and simulated phishing platform.  The Company was founded in 2010 and went public in April 2021.  In February 2023, KnowBe4 was acquired by Vista Equity Partners Management, LLC and its affiliates (collectively, “Vista”) for $4.6 billion (the “Merger”).  Shares of KnowBe4 were traded on the Nasdaq National Market System (“NASDAQ”) prior to the Merger.

The complaint alleges that Defendants made a series of materially false and misleading statements and omissions of material facts in connection with the subject Merger.  In the Court’s order partially denying the Defendants’ motion to dismiss, Judge Altonaga found that “Plaintiffs adequately allege that it was misleading to represent the Special Committee believed the entire mid-to-high $20s range was appropriate and that the Merger was fair to public stockholders.”  The Court also found that “Plaintiffs adequately allege that Defendants contravened [their duty to disclose] by omitting KKR’s decision to significantly depart from the rollover discussed previously — implying that KKR increased its rollover because it believed KnowBe4’s ultimate valuation was relatively low.”

The Court determined that Lead Plaintiffs sufficiently alleged scienter under Section 10(b) of the federal securities laws against Defendants Venkataraman, Klausmeyer, Watzinger, Sjouwerman, KKR, Elephant Partners and Vista with respect to the two categories of misstatements and omissions discussed above – the fairness of the Merger and KKR’s decision to increase its rollover into the post-Merger company.

The case will now proceed to the discovery phase.

A copy of the Court’s Order can be found here.