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NEW YORK, Feb. 05, 2020 (GLOBE NEWSWIRE) -- Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in X Financial (or the “Company”) (XYF) of the February 7, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in X Financial American Depositary Shares (“ADSs”) pursuant and/or traceable to the Company’s September 19, 2018 IPO (the “IPO”), and would like to discuss your legal rights, click here: www.faruqilaw.com/XYF. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to email@example.com.
FARUQI & FARUQI, LLP
685 Third Avenue, 26th Floor
New York, NY 10017
Attn: Richard Gonnello, Esq.
Telephone: (877) 247-4292 or (212) 983-9330
The lawsuit has been filed in the U.S. District Court for the Eastern District of New York on behalf of all those who acquired X Financial American Depositary Shares pursuant and/or traceable to the Company’s September 19, 2018 IPO. The case, Chen v. X Financial et al, No. 19-cv-06908 was filed on December 9, 2019.
The lawsuit focuses on whether the Company and its executives violated federal securities laws in the Company’s Registration Statement by making false and/or misleading statements and/or failing to disclose that: (1) the Company’s total loan facilitation amount was not growing, but rather was contracting; (2) the number of investors actively using X Financial’s platform was shrinking; (3) demand from SMEs for the Company’s preferred loans was plummeting; (4) the Company’s preferred loans had performed so poorly that it had begun drastically scaling back its preferred loans in the first quarter of 2018, several months before the IPO, and was in the process of phasing out such loans completely; (5) demand for the Company’s card loans was also plummeting; (6) the revenue and loan facilitation growth provided in the Registration Statement leading up to the IPO was achieved by relaxed credit and due diligence standards, under which the Company had underwritten tens of millions of dollars’ worth of poor quality loans that suffered from a disproportionately high risk of default as compared to the Company’s earlier loan vintages; (7) the Company was suffering from accelerated delinquency rates from poor quality loans that it had underwritten in the first, second, and third quarters of 2018, which had caused the Company’s delinquency rate to sharply rise; (8) the Company’s product mix had significantly deteriorated; (9) the Company’s net revenue was on track to decline by 22% during the third quarter of 2018; and (10) as a result, the Registration Statement was materially false and/or misleading and failed to state information required to be stated therein.
On November 22, 2019, X Financial’s ADSs closed at $1.74 per ADS. This price represented an 81.68% decline from the $9.50 per share price at which X Financial’s ADSs had been sold to the investing public in the IPO.
As of the date this complaint was filed, X Financial’s ADSs continue to trade below the $9.50 per share IPO price.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding X Financial’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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