Simpson Thacher won a dismissal, on behalf of client Qutoutiao Inc. (“QTT”), a Chinese news-aggregation app, of a putative securities class action suit filed in the U.S. District Court for the Southern District of New York. The suit, filed against QTT and its directors, officers and corporate underwriters, alleged violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 in connection with QTT’s September 2018 IPO, March 2019 secondary public offering, and certain other public disclosures. Among the claims, Plaintiff alleged that QTT failed to disclose that most of QTT’s revenues and revenue growth came from illegal advertisements, QTT inflated revenues reported in its SEC filings, and QTT conducted undisclosed related-party transactions.
On August 3, 2023, Hon. Sidney Stein granted the Firm’s motion to dismiss in full, finding that Plaintiff had not plausibly alleged that Defendants’ statements violated federal securities laws. The court noted that Plaintiff’s Complaint “fails to allege a single misstatement or omission of material fact that could give rise to a Section 10(b) claim,” and similarly “fails to plead facts with particularity as to each defendant” as to the Section 11 claims, and dismissed those and the related claims in their entirety.
The Simpson Thacher team included George Wang, Bryan Jin, Stephanie Hon and Eric Yang.