Alibaba to Pay $433 Million to Settle Antitrust Investor Suit

Alibaba Group Holding Ltd. on Friday announced that it will pay $433.5 million to settle a securities fraud class action in Manhattan federal court.

The accord resolves a consolidated case from shareholders who allege the Chinese e-commerce conglomerate misled investors about its monopolistic practices as well as the collapse of Ant Group Co.'s initial public offering, a fintech company in which Alibaba had substantial equity.

The all-cash payment is one of the 50 largest securities class actions settlements in the US since the Private Securities Litigation Reform Act of 1995 was passed, according to settlement memo filed by the shareholders in the US District Court for the Southern District of New York. The settlement must still be approved by the court.

Shareholders first sued Alibaba and two of its executives in 2020, alleging the company made materially misleading statements about the success of the planned $34.5 billion IPO for Ant Group, best known for its digital payment platform Alipay.

The investors also alleged that Alibaba lied when it said its merchants aren’t exclusively bound to its platform. The company incurred a $2.8 billion antitrust penalty from Chinese regulators.

Judge George B. Daniels last year narrowed the case, tossing out the shareholders’ claims about the botched IPO but allowing the antitrust claims to move forward.

Alibaba said in a regulatory filing on Friday that it denies any fault or liability, and that it entered into the agreement “to avoid the cost and disruption of further litigation.”

Glancy Prongay & Murray LLP is lead counsel for the shareholders. Simpson Thacher & Bartlett LLP represents Alibaba.

The case is In re Alibaba Grp. Holding Ltd. Sec. Litig., S.D.N.Y., No. 1:20-cv-09568, 10/25/24.