The law firm of Kessler Topaz Meltzer & Check, LLP alerts investors of Full Truck Alliance Co. Ltd. that a securities fraud class action lawsuit has been filed on behalf of those who purchased or acquired FTA securities pursuant and/or traceable to the registration statement and related prospectus (collectively, the “Registration Statement”) issued in connection with FTA’s June 2021 initial public offering (the “IPO”).
FTA purports to, with its subsidiaries, operate a digital freight platform that connects shippers with truckers to facilitate shipments in the People’s Republic of China (“PRC”). It offers freight listing, matching, and brokerage services and online transaction services, as well as various value-added services. Yunmanman and Huochebang were founded in 2013 and 2011, respectively, and both companies were digital freight platforms in the PRC prior to their merger which created FTA in 2017.
On May 27, 2021, FTA filed a Registration Statement on a Form F-1, which in combination with subsequent amendments of Forms F-1/A filed pursuant to Rule 424(b)(1), would be used for the IPO. On June 23, 2021, FTA filed its final prospectus for the IPO on a Form 424B4, which forms part of the Registration Statement. In the IPO, FTA sold approximately 82,500,000 American Depositary Shares (“ADSs”) at $19.00 per ADS.
The complaint alleges that the Registration Statement failed to disclose the specific known concerns and issues with FTA’s practices and apparent non-compliance with relevant technology laws. Specifically, the Registration Statement failed to disclose FTA’s non-compliance with the relevant regulations or the potential penalties for its non-compliance—including a suspension of new user additions during a cybersecurity review.
The truth was revealed on July 5, 2021, when FTA issued a press release entitled “Full Truck Alliance Announces Cybersecurity Review in China” which announced, in part, that “the Cybersecurity Review Office (“CRO”) of the Cyberspace Administration of China [“CAC”] . . . has initiated a cybersecurity review of FTA’s Yunmanman apps and Huochebang apps. In order to facilitate the review and prevent the expansion of potential risks, these mobile apps are required to suspend new user registration in China during the review period.”
Following this news, FTA’s ADS price fell $1.27 per ADS, or over 6%, to close at $17.75 on July 6, 2021, the next trading day.
The complaint alleges that the Registration Statement contained false and/or misleading statements and/or failed to disclose that: (1) FTA’s Yunmanman and Huochebang apps would face an imminent cybersecurity review by the CAC; (2) the CAC would require FTA to suspend new user registration; (3) FTA needed to conduct a “comprehensive self-examination of any cybersecurity risks”; (4) FTA needed to “continue to improve its cybersecurity systems and technology capabilities”; and (5) as a result, the defendants’ public statements were materially false and misleading at all relevant times and negligently prepared.
FTA investors may, no later than September 10, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)