Labaton Keller Sucharow LLP Announces Expanded Securities Class Action Lawsuit Filed Against PDD Holdings Inc. and Certain Executives

Business Wire 30-Sep-2024 2:19 PM

Labaton Keller Sucharow LLP ("Labaton") announces that, on September 30, 2024, it filed a securities class action lawsuit (the "Complaint") on behalf of its client Macomb County Retiree Health Care Fund against PDD Holdings Inc. ("PDD" or the "Company") (NASDAQ:PDD) and certain PDD officers (collectively, "Defendants"). The action, which is captioned Macomb County Retiree Health Care Fund v. PDD Holdings Inc. f/k/a Pinduoduo Inc., No. 24-cv-6881 (E.D.N.Y. September 30, 2024) asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired the Company's securities publicly traded on the NASDAQ Stock Market (the "NASDAQ") between April 30, 2021 and August 23, 2024, inclusive (the "Class Period").

The Complaint expands upon the related action against PDD captioned Baxter v. PDD Holdings Inc. f/k/a Pinduoduo Inc., No. 24-cv-05653 (E.D.N.Y. August 13, 2024) (the "First Complaint") by extending the initial class period of April 30, 2021 to June 25, 2024, in the First Complaint, to an expanded Class Period of April 30, 2021 to August 23, 2024 in the newly filed Complaint.

Pursuant to the notice published on August 13, 2024, in connection with the filing of the First Complaint, as required by the Private Securities Litigation Reform Act of 1995, investors wishing to serve as Lead Plaintiff in these related securities actions pending against Defendants are required to file a motion for appointment as Lead Plaintiff by no later than October 15, 2024.

PDD operates the online marketplaces Pinduoduo and Temu, which allow Chinese merchants to sell goods to consumers around the world. The new Complaint expands on the fraud claims in the First Complaint. Specifically, the Complaint alleges that during the Class Period, Defendants misled investors by touting its growth while concealing several factors that rendered this growth unsustainable and posed substantial risks to PDD's business, including: (a) merchant policies that made it unprofitable for vendors to do business on PDD platforms while allowing PDD to grow revenues and save on operational costs; (b) malware issues on PDD applications that exploited customers and obtained user data without consent, including accessing sensitive information; (c) PDD's failure to implement effective compliance systems, including a system to prevent goods made by forced labor from being sold on its platform; and (d) that, due to the foregoing, PDD faced undisclosed risks of poor merchant and customer relations as the platforms scaled, which ultimately led to hundreds of millions of dollars in fees returned to merchants, merchants defecting to competing sites, and the slowing growth of its customer base.

Defendants' fraud began to be revealed through a series of disclosures in 2023 and 2024, culminating on August 26, 2024, when PDD disclosed its quarterly results for the second quarter of 2024 and announced that it had decided not to issue dividends or repurchase shares for the "foreseeable years ahead," and stated that it expects that future profitability will be weighed down by a reduction in transaction fees for high quality merchants to drive the "high-quality development" of its merchant ecosystem. On this news, the price of PDD ADSs fell $39.87, or 29 percent, to close at $100.00 on August 26, 2024.

If you purchased or acquired PDD securities publicly traded on the NASDAQ during the Class Period and were damaged thereby, you are a member of the "Class" and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed no later than October 15, 2024. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action.

If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton at (212) 907-0650 or via email at fmcconville@labaton.com. You can view a copy of the Complaint online here.

Plaintiff Macomb County Retiree Health Care Fund is represented by Labaton Keller Sucharow, which represents many of the largest pension funds in the United States and internationally with combined assets under management of more than $3.5 trillion. Labaton Keller Sucharow's litigation reputation is built on its half-century of securities litigation experience, more than 80 full-time attorneys, and in-house team of investigators, financial analysts, and forensic accountants. Labaton Keller Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, Delaware, London, and Washington, D.C. More information about Labaton Keller Sucharow is available at labaton.com.

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