This lawsuit is for anyone who acquired securities in Luckin Coffee, Inc. (NASDAQ: LK) from May 17, 2019 through April 6, 2020.
The lawsuit alleges that the Company and certain of its executives violated federal law. Specifically, the lawsuit alleges that, both in the Prospectus to the Company's IPO and during the time period mentioned above, the Company misled investors regarding its financial condition. More specifically, the lawsuit alleges that the Company misled investors by intentionally overstating sales figures to make the Company look more profitable than was actually the case.
On January 31, 2020, Muddy Waters Research published a report alleging that Luckin “had evolved into a fraud by fabricating financial and operating numbers starting in [the] 3rd quarter 2019.” Among other allegations, Muddy Waters claims that the “[n]umber of items per store per day was inflated by at least 69% in 2019 3Q and 88% in 2019 4Q” and that “Luckin inflated its net selling price per item by at least RMB 1.23 or 12.3%.” On this news, the price of the Company's stock dropped precipitously on unusually heavy trading volume. Then, on April 2, 2020, before the market opened, Luckin disclosed that "beginning in the second quarter of 2019, Mr. Jian Liu, the chief operating officer and a director of the Company, and several employees reporting to him, had engaged in certain misconduct, including fabricating certain transactions." The Company further revealed that "the aggregate sales amount associated with the fabricated transactions from the second quarter of 2019 to the fourth quarter of 2019 amount to around RMB2.2 billion." As a result, the Company suspended the COO, and Luckin stated that investors should no longer rely on previously issued financial statements. On this news, the price of the Company's again stock dropped precipitously on unusually heavy trading volume. Finally, on April 6, 2020, Goldman Sachs & Co. LLC announced that an entity controlled by Luckin’s co-founder had defaulted on a $518 million margin loan facility and a group of lenders was putting 76.3 million of the Company’s ADS—pledged as collateral for the loan by Luckin’s co-founders—up for sale. On this news, the price of the Company's again stock dropped precipitously on unusually heavy trading volume. Thereafter, NASDAQ halted trading of the Company's stock.
The Law Offices of Howard G. Smith seeks to recover damages on behalf of class members. If you acquired securities in Luckin Coffee, Inc. (NASDAQ: LK) from May 17, 2019 through April 6, 2020 you may join the lawsuit by submitting your information online, or you may call the Law Offices of Howard G. Smith and speak to Mr. Smith directly to learn how he can protect your rights.
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I, the Plaintiff, certify that:
1. I have reviewed the Complaint and authorized its filing.
2. Plaintiff did not purchase the security that is the subject of this
action, at the direction of plaintiff's counsel or in order to
participate in any private action arising under this title.
3. I am willing to serve as a representative party on behalf of a class
and will testify at deposition and trial, if necessary.
4. My transactions in the securities, which are the subject of this
action, during the Class Period set forth in the Complaint are as
5. I have not served as a representative party on behalf of a class
under the federal security laws during the last three years, except
if detailed below.
6. I will not accept any payment for serving as a representative party,
except to receive my pro rata share of any recovery or as ordered
or approved by the court including the award to a representative
plaintiff of reasonable costs and expenses (including lost wages)
directly relating to the representation of the class.
agreement and retain the Law Offices of Howard G. Smith and its associates to proceed on Plaintiff's behalf, on a contingent fee basis. If I am executing this agreement on behalf of an institution, I further certify that I am authorized to execute this agreement on behalf of the institution.