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SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in XP, Inc. of Class Action Lawsuit and Upcoming Deadline - XP

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NEW YORK, NY / ACCESSWIRE / May 15, 2020 / Pomerantz LLP announces that a class action lawsuit has been filed against XP, Inc. ("XP" or the "Company") (XP) and certain of its officers. The class action, filed in United States District Court for the Eastern District of New York, and indexed under 20-cv-01824, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired XP's securities pursuant and/or traceable to the registration statement and related prospectus (collectively, the "Registration Statement") issued in connection with XP's December 2019 initial public offering (the "IPO" or "Offering") compensable damages caused by Defendants' violations of the Securities Act of 1933 (the "Securities Act").

If you are a shareholder who purchased XP's securities during the class period, you have until May 20, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.

[Click here for information about joining the class action]

XP purports to be a leading, technology-driven financial services platform and a trusted provider of low-fee financial products and services in Brazil.

In December 2019, Defendants held the company's Initial Public Offering ("IPO"), offering approximately 83 million Class A common shares to the investing public at $27.00 per share.

In the Registration Statement regarding the IPO, XP reported the following, in pertinent part, regarding Independent Financial Agents ("IFAs"):

"IFAs" means Independent Financial Agents (Agente Autônomo de Investimento) subject to CVM [Comissão de Valores Mobiliários, the Securities and Exchange Commission of Brazil] Instruction No. 497.

Independent Financial Investment Network in Brazil - with a range of proprietary XP Advisory Services and approximately 5,900 IFAs who on-board new clients onto the XP Platform[.]

The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) XP engaged in undisclosed related party transactions; (ii) XP failed to disclose its common and large system failures and connected losses; (iii) XP's aggressive IFA strategy was and is tenuous; (iv) XP had material weaknesses; (v) XP fired its previous accounting firm due that firm finding and disclosing material weaknesses; and (vi) as a result, Defendants' public statements were materially false and misleading at all relevant times.

On March 6, 2020, The Winkler Group released a report (the "Report") detailing, among other things, how XP had misled investors and failed to disclose pertinent information generally and in its Registration Statement, including: (i) undisclosed related party transactions; (ii) R$100M in system failure expenses; (iii) great uncertainty with regards to its IFAs; (iv) the full circumstances regarding its firing and replacing its accounting firm KPMG for PwC; and (v) other undisclosed material weaknesses.

On this news, XP shares plummeted $9.12 per share over the rest of the trading day and the next full trading day, or 25.5%, to close at $26.64 per share on March 9, 2020, damaging investors.

Since the IPO, and as a result of the disclosure of material adverse facts omitted from XP's Registration Statement, XP's stock price has significantly fallen below its IPO price, damaging Plaintiff and Class members.

Additionally, due to the materially deficient Registration Statement, Defendants have also violated their independent, affirmative duty to provide adequate disclosures about adverse conditions, risk and uncertainties. Item 303 of U.S. Securities and Exchange Commission ("SEC"), SEC Reg. S-K, 17 C.F.R. §229.303(a)(3)(ii) requires that the materials incorporated in a registration statement disclose all "known trends or uncertainties" reasonably expected to have a material unfavorable impact on the Company's operations.

SEC Regulation S-K, 17 C.F.R. § 229.503, required the "Risk Factor" section of the Registration Statement to discuss the most significant factors that made the Offering risky or speculative and that each risk factor adequately described the risk. Defendants' failure to disclose the already occurring significant problems underlying its base business, as well as the likely material effects it would have on the Company's share price, rendered the Registration Statement's many references to known risks that "if" occurring "may" or "could" adversely affect the Company as false and misleading.

The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.

SOURCE: Pomerantz LLP

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