Pintec Technology Holdings Limited Class Action Lawsuit
- Company Name
- Pintec Technology Holdings Limited
- Stock Symbol
- Class Period
- Pursuant and/or traceable to the registration statement and prospectus issued in connection with Pintec Technology’s October 2018 initial public offering
- Southern District of New York
The Pintec Technology Holdings Limited class action lawsuit charges Pintec Technology, certain of its officers and directors, and the underwriters of its October 2018 initial public offering (“IPO”) with violations of the Securities Act of 1933. Filed in the Southern District of New York and commenced on September 29, 2020, the Pintec Technology class action lawsuit seeks to represent purchasers of Pintec Technology securities pursuant and/or traceable to the IPO’s registration statement and prospectus (collectively, the “Registration Statement”) and is captioned Yaroni v. Pintec Technology Holdings Limited, No. 20-cv-08062.
Pintec Technology is a technology platform that enables financial services in China by connecting business partners and financial partners with users. On October 25, 2018, Pintec Technology filed its prospectus on Form 424B4 with the U.S. Securities and Exchange Commission (“SEC”), which forms part of the Registration Statement. In the IPO, Pintec Technology sold more than 3.7 million American Depositary Shares (“ADSs” or “shares”) at a price of $11.88 per share. Pintec Technology received proceeds of approximately $41 million from the IPO, net of underwriting discounts and commissions. The proceeds from the IPO were purportedly to be used for general corporate purposes, repayment of shareholder loans, and acquiring a micro-lending license.
The Pintec Technology class action lawsuit alleges that the IPO’s Registration Statement contained misleading statements in that, among other things: (1) Pintec Technology erroneously recorded revenue earned from certain technical service fee on a net basis, rather than a gross basis; (2) there were material weaknesses in Pintec Technology’s internal control over financial reporting related to cash advances outside the normal course of business to Jimu Group, a related party, and to a non-routine loan financing transaction with a third-party entity, Plutux Labs; (3) as a result of the foregoing, Pintec Technology’s financial results for fiscal 2017 and 2018 had been misstated; and (4) as a result of the foregoing, defendants’ positive statements about Pintec Technology’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On July 30, 2019, Pintec Technology filed its fiscal 2018 annual report, in which it restated previously disclosed financial results. Among other things, Pintec Technology reported net income of $315,000 for fiscal 2018, compared to its prior disclosure of $1.068 million net income. Pintec Technology also disclosed that there were material weakness in its internal control over financial reporting related to cash advances outside the normal course of business to Jimu Group, a related party, and to a non-routine loan financing transaction with a third-party entity, Plutux Labs. On this news, Pintec Technology’s share price fell $0.53, or more than 13%, over the next several trading sessions.
Then, on June 15, 2020, Pintec Technology disclosed that it could not timely file its fiscal 2019 annual report and that it anticipated reporting a significant change in results of operations. Specifically, Pintec Technology disclosed that it “erroneously recorded revenue earned from certain technical service fee on a net basis” for fiscal 2017 and 2018. Moreover, Pintec Technology “announced a net loss of RMB906.5 million in the full year of 2019 due to RMB890.7 million of provision for credit loss in amounts due from a related party, Jimu Group, and RMB200 million of impairment in prepayment for long-term investment.”
By the commencement of the Pintec Technology class action lawsuit, Pintec Technology stock was trading as low as $0.92 per share, a nearly 92% decline from the $11.88 per share IPO price.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.