Governance

Alibaba agrees to pay $433.5M to settle security fraud class action

What happened Alibaba Group Holding Ltd. declared on Friday that it would pay $433.5 million to resolve a class action lawsuit alleging securities fraud in a federal court in Manhattan. The settlement resolves a case where Alibaba shareholders accused the company of misleading them about monopolisti…

AuthorBing Lan

Reading Time2 min

PublishedOctober 28, 2024

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Headline

Context

Alibaba Group Holding Ltd. declared on Friday that it would pay $433.5 million to resolve a class action lawsuit alleging securities fraud in a federal court in Manhattan. The settlement resolves a case where Alibaba shareholders accused the company of misleading them about monopolistic practices and Ant Group’s failed IPO. The all-cash payment ranks among the top 50 largest securities class action settlements in the U.S. since 1995. Filed in New York, the settlement awaits court approval.

Evidence

Pending intelligence enrichment.

Analysis

Shareholders initially sued in 2020, claiming Alibaba misrepresented Ant Group’s IPO prospects and misled about merchant exclusivity, leading to a $2.8 billion antitrust fine. Judge George B. Daniels dismissed the IPO claims but allowed the antitrust claims. Alibaba denies liability, saying it agreed to the settlement to avoid further litigation. Glancy Prongay & Murray LLP represents shareholders; Simpson Thacher & Bartlett LLP defends Alibaba. Also read: Alibaba Cloud empowers rural Malaysia with digital education Also read: Alibaba sheds $360M Bilibili stake for AI push and business overhaul

Key Points

Alibaba Group Holding Ltd. announce to pay $433.5M to settle a 2020 case of securities fraud in manhattan court.
The lawsuit was filed by investors and shareholders alleging Alibaba’s monopoly practice.