Yirendai, the first Chinese peer-to-peer lender listed in the US, is facing several class action lawsuits regarding its share price drop in the US stock market but the P2P lender rebutted the suits and will defend its interest.
On Tuesday, both New York and New Jersey-based law firm Bronstein, Gewirtz & Grossman filed a lawsuit accusing Yirendai of making "materially false misleading statements." On the same day Rigrodsky & Long PA filed a legal suit at the Central District of California against the P2P lender's failure to disclose "rising fraud related to customer applications for its loan products," and the negative impact that "the implementation of new anti-fraud regulations could have on Yirendai's performance."
Yirendai, the consumer finance arm of Chinese P2P lender CreditEase, yesterday rejected the complaints as "without merit" and the company intends to defend its interest.
There were public doubts about Yirendai's allegedly manipulation of its shares as only 14 percent of them are actually traded in the market, according to observers,
Meanwhile, foreign investors also worry that regulations imposed by the China Banking Regulatory Commission will impact the P2P lender.
On August 23, the CBRC imposed limits on P2P lending amid the Chinese government's concern on defaults and fraud among the nation's 2,349 online lenders.
The action caused shares of Yirendai to fall 22 percent on the US market the next day. The shares have plunged 44 percent over a four-day trading period.
Fifteen Chinese firms were sued in securities class action lawsuits in the US in 2015, taking up over 40 percent of all shareholder suits filed against US-listed foreign firms, research by Stanford Law School and Cornerstone Research showed.