A class action lawsuit was filed against Chinese finance and wealth management provider Lufax Holding (LU) on March 21, 2026.
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Plaintiffs in the federal securities lawsuit allege that they acquired Lufax American Depositary Shares (“ADS”) at artificially inflated prices between April 7, 2023 and January 26, 2025, known as the Class Period. They are now seeking compensation for financial losses incurred upon public revelation of the company’s alleged misconduct during that time. To learn whether you may be eligible for a recovery under this securities lawsuit, click here.
What Does Lufax Do?
Lufax describes itself as a leading financial services enabler for small business owners in China, operating in retail credit and credit enablement, with headquarters in Shanghai’s Pudong New District, and is a publicly traded financial technology holding company incorporated in the Cayman Islands.
It works with 85 financial institutions in China as funding partners. Its offerings include various loans and wealth management products, among other things.
Why are Shareholders Suing Lufax?
Investors allege that the company repeatedly assured shareholders that its internal controls and financial reporting were effective, while certain financial results were materially misstated. In January 2025, the company disclosed that its auditor PricewaterhouseCoopers had raised significant concerns about financial disclosures and that its audit opinions for 2022 and 2023 Annual Reports could no longer be relied upon. The subsequent restatement revealed that net profit had been overstated by RMB 917.0 million for 2022 and RMB 81.4 million for 2023, causing the stock to decline by approximately 22% over three trading sessions.
A Deeper Dive
According to the complaint, Lufax Holding Ltd, Chief Executive Officer Yong Suk Cho, and Chief Financial Officer David Siu Kam Choy allegedly misled investors about the effectiveness of the company’s internal controls and the accuracy of its financial reporting throughout the class period, by issuing false and misleading statements and failing to disclose material adverse facts.
On April 7, 2023, when Lufax Holding Ltd filed its 2022 Annual Report on Form 20-F with the U.S. Securities and Exchange Commission, management with the participation of the CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2022, ensuring that information required under the Exchange Act was properly recorded, processed, summarized and reported within specified timeframes. Management further concluded that internal control over financial reporting was effective as of that date.
The following year, on April 23, 2024, management issued nearly identical assurances in the company’s 2023 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission. Once again, with the participation of the CEO and CFO, management concluded that disclosure controls and procedures were effective as of December 31, 2023, and that internal control over financial reporting was effective as of that date.
The complaint alleges these repeated assurances created a false picture of financial reliability and operational integrity, including material misstatements in financial reports. Investors allege that behind these confident statements, Lufax Holding Ltd actually lacked adequate internal controls and that certain financial results were materially misstated.
The Truth Emerges
The alleged deception began to unravel on January 27, 2025, when Lufax Holding revealed that it had fired PricewaterhouseCoopers as its auditor. The disclosure revealed that PwC had significant concerns about Lufax Holding Ltd’s financial disclosures, particularly the 2022 and 2023 Annual Reports. The concerns were serious enough that PwC stated its audit opinions for those years and those Annual Reports should no longer be relied upon. PwC disclosed that on October 25, 2024, it received information during a conversation with a then-current senior executive that raised concerns about certain possible related party transactions of the company.
The full extent of the financial misstatements became clear on February 17, 2026, when Lufax Holding Ltd filed its 2024 Annual Report. Independent auditors following a re-audit found that certain line items were inaccurately recorded in the consolidated financial statements, and restated its financial results. The overstatement of total income for 2022 was RMB 493.8 million, while total income for 2023 was understated by RMB 33.3 million. These errors resulted in a decrease in net profit of RMB 917.0 million for 2022 and RMB 81.4 million for 2023.
Its share price has dropped 33% over the last 6 months – see below:
The Next Steps
If you have purchased the company’s ADS during the Class Period, you may join the securities lawsuit as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole. To learn more about your options, click here.
The deadline to file for lead plaintiff in this securities lawsuit is May 20, 2026.