Feds subpoena Snap over shareholder lawsuit

Snap Inc. has received federal subpoenas related to a class-action lawsuit stemming from its 2017 initial public offering.

The lawsuit, filed last May, claims that Snap misled investors about its user growth before going public.

The company said in a statement Wednesday that it has been responding to subpoenas and requests for information from the Securities and Exchange Commission and the Department of Justice. The company says its understanding that the regulators are looking into disclosures during its initial public offering about competition from Instagram.

The SEC and the DOJ declined to comment. Snap says it believes that the lawsuit is "meritless" and its IPO disclosures were "accurate and complete."

Snap has struggled to compete with Instagram especially after the Facebook-owned app successfully copied its popular "stories" feature.