NEW YORK, June 17, 2019 /CNW/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Momo Inc. ("Momo" or the "Company") (NASDAQ: MOMO) and certain of its officers. The class action, filed in United States District Court, for the Southern District of New York, and indexed under 19-cv-04433, is on behalf of a class consisting of all persons and entities who purchased or otherwise acquired Momo securities between April 21, 2015 and April 29, 2019, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Momo securities during the class period, you have until July 15, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Momo operates a mobile-based social and entertainment platform in the PRC. The Company operates the Momo platform that includes its Momo mobile application (or "app") and various related features, functionalities, tools, and services to users, customers, and platform partners.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Momo's compliance procedures and controls were inadequate to prevent, inter alia, illicit financial reporting activity; (ii) Momo's social and dating app, Tantan, was materially noncompliant with PRC law and/or regulations; (iii) Tantan was consequently at an increased risk of being removed from Chinese app stores at the direction of Chinese governmental authorities; and (iv) as a result, Momo's public statements were materially false and misleading at all relevant times.
On June 27, 2018, Spruce Point Capital Management LLC ("Spruce Point") issued a short seller report on Momo, recommending a "strong sell" opinion on the Company's shares citing, inter alia, possible compliance issues under PRC regulation (the "Spruce Point Report"). According to several agencies cited throughout the Spruce Point Report, Momo had a reputation for being a "sex cam" service—i.e., Momo users were using Momo's services for illicit sexual content. The Spruce Point Report highlighted how these services put Momo at an increased risk of violating the Ministry of Commerce's ("MOC") and the State Administration of Radio, Film and TV's ("SARFT") new regulations limiting the behavior of live streamers and raising accountability for platforms. The Spruce Point report also alleged various illicit financial reporting activity by Momo.
Following the publication of the Spruce Point Report, Momo's American depositary receipt ("ADR") price fell $2.48 per share, or 5.47%, to close at $42.86 per share on June 27, 2018.
On June 28, 2018, Momo issued a press release, appended as an exhibit to Momo's report on Form 6-K with the SEC, denying the allegations in the Spruce Point Report.
Despite its public denial, the Company's inadequate compliance procedures and controls came to a head on April 29, 2019, when Momo issued a press release disclosing that the Tantan social and dating mobile app had been removed from certain mobile app stores at the direction of Chinese authorities (the "April 2019 Press Release").
On this news, Momo's ADR price fell $2.51 per share, or 6.81%, to close at $34.36 per share on April 29, 2019.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
SOURCE Pomerantz LLP