Swedish pension fund Sjunde AP-Fonden, or AP7, and the Louisiana Sheriffs’ Pension & Relief Fund will lead a securities class action against Luckin Coffee Inc., a Chinese coffeehouse chain embroiled in an accounting scandal, a federal court in Manhattan said.
Their attorneys at Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check LLP were also appointed class counsel.
Muddy Waters Research in January published a report stating that Luckin had fabricated key financial performance metrics. Luckin in April announced that investors shouldn’t rely on the company’s previous financial statements, and later admitted that its chief operating officer and other employees had fabricated millions of dollars worth of sales. Nasdaq said it would delist the company.
AP7 and the sheriffs’ fund, which together have a stated interest in the case of $6.9 million, beat out several other candidates to lead a securities class action against Luckin. The two have extensive experience prosecuting class action securities suits, the U.S. District Court for the Southern District of New York said.
There’s no evidence suggesting a conflict of interest with other class members, and they’ve retained counsel that’s highly experienced with securities class actions, Judge Lewis J. Liman added.
Luckin is represented by Davis Polk & Wardwell LLP.
The case is Cohen v. Luckin Coffee Inc., S.D.N.Y., No. 1:20-cv-01293, 6/15/20.