#China #Shanghai #Securities Class Action #Hagens Berman #Lufax Holding

Lufax Holding Faces Class Action Lawsuit

In a recent development, Hagens Berman Sobol Shapiro LLP has initiated a class action lawsuit against Lufax Holding Ltd. (NYSE: LU), targeting investors who acquired Lufax securities between April 7, 2023, and January 26, 2025. This legal action arises following the company’s revelation on January 27, 2025, that it had dismissed its auditor due to concerns regarding undisclosed related-party transactions, which led to a steep decline of nearly 14% in the stock price of Lufax American Depositary Shares.

Background of the Lawsuit

The recent upheaval at Lufax has raised serious questions about the integrity of its financial reporting. Hagens Berman, known for its focus on protecting shareholder rights, is investigating whether Lufax violated federal securities laws by failing to maintain adequate internal controls over financial reporting. The firm has encouraged Lufax investors who suffered significant financial losses to come forward and participate in the lawsuit, as well as calling upon any potential witnesses who may assist in this investigation.

Lufax, which presents itself as a leading financial service provider for small business owners in China, had reassured investors that its finances complied with accredited accounting principles and that it maintained effective internal controls. However, the class action complaint contradicts these claims, citing significant inadequacies in Lufax’s internal controls and material misstatements in financial results.

Key Events Leading to Legal Action

The troubles came to light when, in January 2025, Lufax disclosed that its auditor, PricewaterhouseCoopers (PwC), had been removed due to disagreements related to undisclosed transactions that necessitated an independent investigation. Lufax characterized PwC's concerns as being centered around potential conflicts of interest, which PwC indicated through the need for a thorough investigation involving independent experts. On that day, the news of this dismissal shocked investors, causing a dramatic sell-off.

Subsequent reports revealed a series of complex transactions that Lufax engaged in between May 2023 and June 2024 involving trusts with connections to Lufax-associated entities. This raised alarms as it indicated possible intentional misrepresentation in accounting practices that significantly distorted the company’s financial standing.

Hagens Berman's Position

Reed Kathrein, a partner at Hagens Berman leading this investigation, stated, "Our firm is determining whether Lufax intentionally breached applicable accounting rules and failed to disclose critical information regarding related-party transactions." This is crucial as shareholders deserve full transparency about the company’s dealings that could affect their investments.

The timeline for the lawsuit indicates the Lead Plaintiff Deadline is set for May 20, 2026, creating a pressing situation for affected investors to act swiftly.

Investors who believe they have incurred substantial losses or possess information relevant to the investigation are urged to reach out to Hagens Berman. Additionally, whistleblowers with non-public details regarding Lufax's operations are encouraged to consider their options for contributing to the investigation, potentially benefiting from the SEC Whistleblower program, which offers significant rewards for crucial information.

Conclusion

This ongoing case underscores the importance of corporate accountability and transparency within the financial sector, particularly as it pertains to investor rights and protections. With Hagens Berman’s reputation built on securing justice for corporate misconduct, this lawsuit could lead to significant implications for Lufax, its current operations, and future investor confidence. Anyone involved or aware of further details is encouraged to stay informed and take action as necessary, with centralized resources available at Hagens Berman’s designated communication channels.