Lufax Holding Ltd (LU) Securities Class Action

Lufax, which describes itself as a “leading financial services enabler for small business owners in China,” has repeatedly assured investors that its financial statements were prepared in conformity with applicable accounting rules and that its internal control over financial reporting was effective.

In contrast to the company’s assurances, the class action complaint alleges Lufax lacked adequate internal controls and certain Lufax financial results were materially misstated.

Investors began to learn the truth on January 27, 2025. That day, Lufax revealed that its auditor (PricewaterhouseCoopers or “PwC”) was orally notified of its removal on January 16, 2025, less than six months after the company’s Audit Committee reappointed the firm.

Lufax framed PwC’s disagreement with the company as based on PwC’s concerns about undisclosed related party transactions that PwC said warranted an expert and independent investigation. The company also said “[w]hilst PwC noted that the Audit Committee engaged forensic accountants and independent investigation counsel […] PwC  raised questions about the investigation, the independence of the Audit Committee, and the Company’s remedial actions.”

Perhaps more concerning to investors, PwC refused to “consent to the incorporation of its prior audit or review opinions in any current or future Company filings” and said that, since it could not rely on the Company’s representations in connection with its 2022 and 2023 financial statements, PwC’s audit opinions for those years should no longer be relied upon.

The market swiftly reacted, sending the price of Lufax shares down about 14% that day.

After the Class Period, on April 23, 2025, Lufax revealed that it had engaged in a series of byzantine transactions as the sole investor in certain trusts from May 2023 to June 2024.

These involved the trusts’ purchases of assets from Lufax-affiliated entities. The company also said that it “entered into these transactions to buy back via these trusts the underlying assets[]” and that, based on the way the transactions were accounted for, its “balance sheet showed an overstatement of both assets and liabilities since the second half of 2023.”

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the LU investigation about?

We are investigating whether Lufax intentionally violated applicable accounting rules and disclosure requirements when it comes to full transparency about related-party transactions.

WHAT SHOULD I DO?

I worked at LU. What should I do?

If you were an employee of LU, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in LU, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any LU investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.