U.S. Law Firms to Investigate JD.com for Disclosure Failure —Caixin Global
What happened: Three US-based law firms have announced investigations on behalf of JD.com’s shareholders looking into whether the company issued misleading statements or failed to disclose information about the arrest of its CEO Richard Liu on rape charges. JD hasn’t filed anything regarding the case to the US Securities and Exchange Commission.
Why it’s important: Class action lawsuits against listed companies are not uncommon in the US. Last month the three firms which are now investigating JD—Rosen, Schall, and Pomerantz— announced investigations along with three other law firms into the newly-listed e-commerce platform Pinduoduo over fake products. JD’s shares have plunged 16% during Tuesday and Wednesday reaching a 19-month low after Liu’s arrest. Its US shares closed at $26.30 on Wednesday. After its arrest on August 31, Liu was released without bail and charges and is currently in China.