NEW YORK--(BUSINESS WIRE)--Scott+Scott Attorneys at Law LLP (“Scott+Scott”), an international shareholder and consumer rights litigation firm, announces the filing of a class action lawsuit against Qutoutiao Inc. (“Qutoutiao” or the “Company”) (NASDAQ: QTT), certain of its officers and directors, and the underwriters of the Company’s September 2018 initial public offering (“IPO”), alleging violations of federal securities laws. If you purchased Qutoutiao American Depository Shares (ADS) pursuant and/or traceable to the Company’s IPO on or about September 14, 2018, and have suffered losses, you are encouraged to contact Jonathan Zimmerman for additional information at (888) 398-9312 or jzimmerman@scott-scott.com.
The lawsuit alleges that Qutoutiao (and the other named defendants) misled investors by failing to disclose that, among other things: (1) that Qutoutiao replaced its advertising agent with a related party, thereby bypassing third-party oversight of the content and quality of the advertisements; (2) that Qutoutiao placed advertisements on its mobile app for products whose claims could not be substantiated and thus were considered false advertisements under applicable regulations; (3) that, as a result, Qutoutiao would face increasing regulatory scrutiny and reputational harm; and (4) that, as a result Qutoutiao’s advertising revenue was likely to decline. Due to the foregoing, according to the complaint filed, the defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
Then on December 10, 2019, Wolfpack Research published a report entitled “QTT: Fake Revenue, Non-Existent Cash, Undisclosed Related Parties,” alleging, among other things, that Qutoutiao overstated its revenues by recording non-existent advances from advertising customers and, further, that Qutoutiao replaced its third-party advertising agent with a related party, allowing it to “perpetrate the unmitigated ad fraud that [Wolfpack] observed in [its] sample.” Following this news, the Company’s securities fell nearly 4%.
Then, on July 15, 2020, hosts of a consumer rights gala stated that Qutoutiao had allowed ads on its platform promoting exaggerated or impossible claims from weight-loss products. Following this news, Qutoutiao ADSs plummeted 23%, to close at $2.84 per ADS on July 16, 2020.
On July 17, 2020, Chinese media reported that Qutoutiao’s app had been removed from domestic Android app store.
What You Can Do
If you purchased Qutoutiao ADS, or if you have questions about this notice or your legal rights, you are encouraged to contact attorney Jonathan Zimmerman at (888) 398-9312 or jzimmerman@scott-scott.com, or visit the Qutoutiao page on our website at https://scott-scott.com/case/qutoutiao-inc/. The lead plaintiff deadline is October 19, 2020.
About Scott+Scott Attorneys at Law LLP
Scott+Scott has significant experience in prosecuting major securities, antitrust, and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide with offices in New York, London, Connecticut, California, and Ohio.
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