NEW YORK, NY / ACCESSWIRE / January 24, 2019 / Pomerantz LLP announces that a class action lawsuit has been filed against, PPDAI Group Inc. ("PPDAI" or the "Company") (PPDF) and certain of its officers. The class action, filed in United States District Court, Eastern District of New York, and indexed under 19-cv-00168, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise, acquired PPDAI American Depositary Shares ("ADS's") pursuant or traceable to the F-1 registration statement, F-6 registration statement, and related Prospectus (collectively, the "Registration Statement") issued in connection with PPDAI's November 2017 initial public share offering (the "IPO" or the "Offering"), who were damaged thereby, and who seek to pursue remedies under the Securities Act of 1933 ("Securities Act").
If you are a shareholder who purchased PPDAI ADS's pursuant or traceable to the Company's registration statement and prospectus, you have until January 25, 2019, 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 email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
PPDAI was founded in 2007 and is headquartered in Shanghai, the People's Republic of China. PPDAI is an investment holding company and online Peer-to-Peer ("P2P") consumer finance platform in China, as well as the first online consumer finance marketplace in China matching borrowers and investors with unserved or underserved needs by traditional financial institutions together. PPDAI had approximately 65 million cumulative registered users as of December 31, 2017.
PPDAI's propriety P2P platform facilitates loan transactions and provides services that match borrowers to lenders offering short-term loans. PPDAI's revenue is generated primarily from fees charged to borrowers for matching them with investors, as well as other services provided during a given loan's lifecycle.
In November 2017, pursuant to its Registration Statement, PPDAI issued approximately 17 million ADS's at $13.00 per ADS in its IPO, raising $221 million.
The complaint alleges that 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) PPDAI was engaging in predatory lending practices, burdening subprime borrowers and individuals with poor or limited credit histories with debt at high-interest rates that they could not afford to repay; (ii) PPDAI's revenues and active borrower numbers were inflated by the many PPDAI consumers that used PPDAI loans to repay their existing loans that they could not otherwise afford to repay, which also increased the risk of borrower defaults; (iii) PPDAI was experiencing a rise in delinquency rates that negatively impacted its reserves; (iv) PPDAI's touted "rapid growth" in both loan number and loan amount had materially fallen; (v) PPDAI was providing online loans to college students despite a government ban on the practice; (vi) PPDAI engaged in overly aggressive and improper collection practices; (vii) PPDAI was at a heightened risk of adverse action from Chinese regulators because of its improper lending, underwriting, and collection practices; and (viii) as a result of the foregoing, PPDAI's Registration Statement was materially false and misleading at all relevant times.
On November 21, 2017, Chinese regulators issued an administrative order banning the issuance of new online peer-to-peer licenses, citing improper and illegal practices by companies such as PPDAI, including extremely high-interest rates, illegal collections, and lack of risk management.
On this news, PPDAI's ADS price fell $2.62 per share, or over 24%, to close at $8.18 per share on November 22, 2017.
On December 1, 2017, Chinese regulators issued another order that outlined specific guidelines meant to correct the improper practices of online lenders such as PPDAI, including, inter alia, a 36% cap on annualized interest or fees charged on lending products, enhanced risk management requirements, and stricter restrictions on aggressive collection practices.
On this news, PPDAI's ADS price fell $2.44 per share, or over 25%, over the next few trading days to close at $7.16 per share on December 7, 2017.
PPDAI's ADS's are now trading at $3.77 per share, 71% below the IPO price.
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