360 DigiTech, Inc.
360 DigiTech, Inc. (“DigiTech” or the “Company”), through its subsidiaries, operates a digital consumer finance platform under the 360 Jietiao brand in the People’s Republic of China (“PRC”). Its platform provides online consumer finance products to the borrowers funded by institutional funding partners. The Company also provides incremental credit assessment, collection, and other services, as well as guarantee for defaulted loans. The Company was formerly known as 360 Finance, Inc. and changed its name to 360 DigiTech, Inc. in September 2020.
On July 8, 2021, Seeking Alpha reported chatter on social media that the Company’s core product offering, the 360 IOU app, has been removed from app stores.
On this news, the Company’s share price fell $7.12, or 21%, to close at $26.02 per share on July 8, 2021.
Then, on July 9, 2021, Seeking Alpha reported that 360 DigiTech confirmed the removal of its 360 IOU app from the Android app store and quoted a Company spokesperson, who disclosed that the Company had “submitted a new rectification plan and stepped up the whole process.”
A securities class action has been filed against 360 DigiTech on behalf of shareholders that purchased 360 DigiTech shares between April 30, 2020 through July 7, 2021. This case has been filed in the U.S. District Court for the Southern District of New York.
The complaint filed alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the Company had been collecting personal information in violation of relevant PRC laws and regulations; (2) accordingly, 360 DigiTech was exposed to an increased risk of regulatory scrutiny and/or enforcement action; and (3) as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
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