A Ropes & Gray litigation team secured a complete dismissal of a securities class action lawsuit on behalf of the underwriters of the IPO of American Depositary Shares (ADS) issued by Yunji Inc., a leading social e-commerce platform based in China. The underwriter group includes Morgan Stanley, JPMorgan, Credit Suisse, China International Capital Corporation, and Tiger Brokers.
Filed in the Eastern District of New York, the lawsuit alleged that Yunji violated the securities laws by failing to adequately disclose the alleged significance of Yunji’s shift to a third-party marketplace business model. Plaintiffs alleged that the disclosure of Yunji’s financial results purportedly driven by this shift caused Yunji’s ADS to decline from the IPO price of $11.00 per ADS to $4.37 per ADS.
On March 31, 2021, Judge LaShann DeArcy Hall dismissed the case in its entirety. The Court accepted the defendants’ arguments that (i) Yunji’s IPO registration statement complied with SEC Item 101, requiring a registrant to describe the general development of its business; (ii) Plaintiffs had not alleged a “trend” that needed to be disclosed under SEC Item 303; and (iii) Yunji did not otherwise make any false or misleading statements in the registration statement as a matter of law.
The New York-based Ropes & Gray team was led by litigation & enforcement co-chair Gregg Weiner.
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