Gaotu Techedu Inc. must defend against US shareholder claims that it misleadingly glossed over the gravity of the People’s Republic of China’s impending restrictions on the after-school tutoring industry, a judge ruled.
The plaintiffs plausibly alleged that several risk disclosures and public statements were knowingly misleading about the upcoming 2021 regulations’ effect on the Chinese online tutoring company, Judge Pamela K. Chen of the US District Court for the Eastern District of New York said Thursday. However two other challenged statements were optimistic “puffery” and not actionable, Chen said.
The double reduction policy, issued in 2021, prohibits tutoring programs ...
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