| COMPANY |
PDD Holdings Inc. f/k/a Pinduoduo Inc. |
| COURT |
United States District Court for the Eastern District of New York |
| CASE NUMBER |
24-cv-05653 |
| JUDGE |
The Hon. TBD |
| CLASS PERIOD |
April 30, 2021 through June 25, 2024 |
| SECURITY TYPE |
Securities |
LEAD PLAINTIFF DEADLINE IS OCTOBER 15, 2024.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
PDD is a multinational commerce group that owns and operates a portfolio of businesses. Two of the company's largest businesses are Pinduoduo and Temu. Throughout the Class Period, Defendants made materially false and/or misleading statements and/or failed to disclose information relating to two main issues which materially affect its core operations. The first pertains to the company’s applications and that they contained malware which was designed to obtain user data without the user's consent, including reading private text messages. The second pertains to company’s failure to implement a system to prevent goods made by forced labor from being sold on its platform. As a result of such failure, PDD has openly sold banned products on its Temu platform.
With regards to malware on the company’s applications, there were several partial disclosures during the Class Period. For example, on March 21, 2023, Reuters published an article revealing that Google had suspended the Pinduoduo app after malware issues were found on versions of the Chinese e-commerce app. On this news, the price of PDD American Depositary Shares (“ADS’s”) declined by $3.35 per share, or over 4%, to close at $75.58 per share on March 22, 2023. Then on April 2, 2023, CNN published an article indicating that the Pinduoduo app "can also bypass users' cell phone security to monitor activities on other apps, check notifications, read private messages and change settings." According to CNN, Pinduoduo's conduct "is highly unusual, and it is pretty damning for Pinduoduo." On this news, the price of PDD ADS’s declined $1.06 per share, or 1.4%, to close at $74.84 per share on April 3, 2023.
Finally, on June 25, 2024, the Attorney General of Arkansas announced that he sued Temu for violations of the Arkansas Deceptive Trade Practices Act and the Arkansas Personal Information Protection Act. The announcement stated that "[t]hough it is known as an e-commerce platform, Temu is functionally malware and spyware. It is purposefully designed to gain unrestricted access to a user's phone operating system." On this news, PDD ADS’s fell over 1% on June 26, 2024, and then an additional nearly 5%, to close at 131.94 per share on June 27, 2024.
With regards to the use of forced labor, the company was the subject of a Congressional Report issued on June 22, 2023 which highlighted many of the company’s failures to prevent this illegal practice. That same day, The New York Times published an article about the Congressional Report titled, "Congress Spotlights ‘Serious' Forced Labor Concerns With Chinese Shopping Sites." The article stated that "[l]awmakers are flagging what they say are likely significant violations of U.S. Law by Temu, a popular Chinese shopping platform, accusing it of providing an unchecked channel that allows goods made with forced labor to flow into the United States." The following day, on June 23, 2023, Business Insider published an article based on Congress's investigation titled, "Temu reportedly relies on customers and suppliers to report if goods from the site were produced by forced labor." On this news, PDD ADS’s fell by $3.09 per share, or over 4%, to close at $69.80 per share on June 23, 2023.
Finally, on February 12, 2024, after the market closed, Fox Business published an article entitled “Temu’s Super Bowl ads spark backlash over China-based firm’s forced labor allegations.” The article illustrated the increased attention from American lawmakers on Temu and PDD, including noting that “Members of Congress took to social media to call out Temu’s data practices and links to forced labor in China as they sought to advise American consumers against downloading the app.”
On this news, the price of PDD ADS’s declined $2.53 per share, or 1.92%, to close at $129.04 per share on February 13, 2024.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.