On October 25, 2024, Alibaba Group Holding Ltd. on Friday announced that it will pay $433.5 million to settle a securities fraud class action in Manhattan federal court. Shareholders alleged that the Chinese e-commerce conglomerate misled investors about its monopolistic practices as well as the collapse of Ant Group Co’s initial public offering, a fintech company in which Alibaba had equity. The accord resolves this whole case. The all-cash payment is in the top 50 largest securities class actions settlements in the US since the Private Securities Litigation Reform Act of 1995 was approved. The settlement is now waiting for the approval by the US District Court for the Southern District of New York. The initial summons from the investors was filed in 2020, alleging the company released misleading statements on the planned $34.5 billion IPO for Ant Group, known for its digital payment platform Alipay. Moreover, shareholders complained that Alibaba falsely declared that its merchants weren’t exclusively bound to its platform. As a consequence of that, Alibaba incurred a $2.8 billion antitrust penalty from Chinese regulators. In a regulatory on Friday, Alibaba denied any fault or liability, alleging that it entered into the agreement “to avoid the cost and disruption of further litigation.”
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