Alibaba Investors Win Lead Plaintiff for Ant Group IPO Dispute

Alibaba Group Holding Ltd. investors who say it misled them about a shelved public offering of Ant Group, in which it had a 33% interest, secured a lead plaintiff for their suit in federal court in New York Thursday.

Investors accuse the Chinese online retail giant of not telling them that Ant Group’s planned IPO wasn’t likely to go forward. Individual investor Salem Gharsalli will take the lead in litigating the securities suit for the would-be class, the U.S. District Court for the Southern District of New York said.

Gharsalli alleged more than $2.9 million in losses, more than any other potential lead plaintiff, giving him the largest financial interest in the suit’s outcome, Judge George B. Daniels’ order said. The investor group with the second-highest alleged losses claimed to have lost more than $2.2 million combined.

Another would-be lead plaintiff argued that Gharsalli would be subject to a unique defense because of the timing of his securities purchases. But the “publications issued before his purchases did not reveal the alleged fraud,” so the purchase timing won’t necessarily subject Gharsalli to extra scrutiny, Daniels said.

Gharsalli also offered to add another individual investor—Laura Ciccarello, who filed the original complaint and shares attorneys with Gharsalli—as an additional plaintiff in the amended complaint, and he may do so, the order said.

Daniels also approved Gharsalli’s selection of Glancy Prongay & Murray LLP as lead counsel for the proposed investor class.

Simpson Thacher & Bartlett LLP represents Alibaba.

The case is Ciccarello v. Alibaba Grp. Holding Ltd., S.D.N.Y., No. 1:20-cv-09568, lead plaintiff appointed 2/10/22.