Investors who purchased shares of Didi Global, the Chinese ride-sharing company, may have the right to file their own claim to recover their losses. While there are currently uncertified class actions that have been filed, securities class actions frequently result in notoriously small settlements as a percentage of the damages suffered by class members. For instance, according to a report by Cornerstone Research, the median settlements in 2019 for 10b-5 Securities Class actions was less than 5% of the damages suffered. However, the good news is that investors have a choice and may be able to pursue their claims directly without relying on a class action case.
According to a report by the Wall Street Journal Didi “gave regulators in Bejing the impression it would pause the IPO.” However, it did not do so despite Chinese officials urging the company to postpone the share sale. At the same time, Didi “sped up the process” of the IPO reflecting “one of the shortest periods to take investor orders for an IPO in recent memory.”
As a result, Didi, and the underwriters, including Morgan Stanley, J.P. Morgan, Barclays, HSBC, UBS, and others are facing class-action lawsuits. Those class claims allege that the defendants made false and/or misleading statements or failed to disclose that: (1) the Cyberspace Administration of China (“CAC”) urged DiDi to delay its IPO; (2) DiDi had the problem of collecting personal information in violation of relevant PRC laws and regulations; (3) DiDi could not guarantee data security; (4) due to the foregoing, DiDi would face “serious, perhaps unprecedented, penalties” from relevant authorities; (5) DiDi and its many apps would face an imminent cybersecurity review by the CAC, which could lead to the removal of Didi’s apps from app stores; and (6) as a result, defendants’ statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
Individual investors who suffered losses from investments in Didi may have a right to bring their own claims. We represent investors on a contingency fee basis meaning there are no upfront costs to you, and you do not owe us any fees unless we make a recovery on your behalf. We can provide a free and confidential evaluation of any potential claims.
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