SHAREHOLDER ALERT: Law Firm Pomerantz Reminds Shareholders of Losses Suffered on Their Investment iQIYI, Inc. and Against Goldman Sachs Group Inc. and Morgan Stanley of Class Action and Upcoming Deadline – GS; MS | national news


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NEW YORK, December 29, 2021 / PRNewswire / – Pomerantz LLP Announces that a Class Action has been filed against Goldman Sachs Group Inc. and Morgan Stanley (together, the “Defendants”) on behalf of investors in iQIYI, Inc. (“iQIYI” or the “Company ”) (NASDAQ: QI). The class action, filed in United States District Court of the Southern District of New York, and registered as 21-cv-10999, is in the name of all investors who have purchased or otherwise acquired iQIYI shares at the same time as the illegal transactions of the defendants of March 22, 2021 through and including March 29, 2021 (the “Remedy Period”), pursuant to Sections 20A, 10 (b) and 20 (a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 USC §§ 78t-1, 78j (b) , and 78t (a).

If you are a shareholder who purchased iQIYI shares during the Class Period, you have up to January 31, 2022 ask the court to appoint you as the principal plaintiff for the group. 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. 7980. Those inquiring by e-mail are encouraged to provide their mailing address, telephone number and the number of shares purchased.

[Click here for information about joining the class action]

Archegos Capital Management (“Archegos”), a family office investment fund, was founded and managed by Sung Kook Hwang (“Hwang”), a former portfolio manager of Tiger Asia Management, a hedge fund he also founded.

Goldman Sachs and Morgan Stanley are global financial services institutions that have served as primary brokers for Archegos, helping it with transactions and lending capital to it in the form of a margin loan.

Archegos has taken large and concentrated positions in companies such as ViacomCBS Inc. (“ViacomCBS”), Vipshop Holdings Ltd., Discovery Inc., Farfetch Ltd., Gaotu Techedu, Inc., Baidu Inc., iQIYI and Tencent Holdings Ltd. through financial instruments called “total return swaps”, in which the underlying securities are held by banks which trade the investments.

Unbeknownst to investors and regulators, several large brokerage banks, including the defendants, had each simultaneously allowed Archegos to take billions of dollars of exposure to volatile stocks through swap contracts, increasing significantly the risk posed by these concentrated positions.

At March 23, 2021 ViacomCBS announced a new $ 3 billion offering to help fund investments in its streaming service, Paramount +, which launched earlier this month.

At March 25, 2021, one of Wall Street’s most influential research firms, MoffettNathanson, released a report questioning the value of ViacomCBS, downgrading the stock to ‘sell’ and setting a price target of just $ 55 per share, compared to $ 85 to offer. “We never, ever thought we would see Viacom[CBS] trade near $ 100 per share, ”the report reads. “Obviously neither is ViacomCBS management,” he continued, citing the new share offering.

As a result of this report, ViacomCBS stock collapsed, losing more than half of its value in less than a week. Indeed, at market close on Friday March 26, 2021, ViacomCBS was worth $ 48 per share.

This proved to be extremely problematic for Archegos, who had traded ViacomCBS on margin. Because Archegos had to maintain a certain amount of collateral to satisfy its lenders, and as the value of the ViacomCBS share declined considerably, Archegos needed enough collateral to cover, or else a margin call (where the lender can force a sale of the stock to bring the investor back into line with the margin requirements), could be triggered.

At March 27, 2021, it was reported that Archegos did not cover and, therefore, had to liquidate more than $ 20 billion of its leveraged equity positions on Friday March 26, 2021.

The complaint alleges that, throughout the period of the action, the defendants sold a large number of iQIYI shares during the week of March 22, 2021, while in possession of material non-public information. According to subsequent media reports, the defendants unloaded large block transactions made up of stocks from the doomed bets of Archegos, including billions of iQIYI securities, at the end Thursday 25 March 2021, before Archegos’ story reached the public, sending iQIYI’s shares into free fall.

As a result of these sales, the defendants avoided billions of losses combined.

The defendants knew, or were reckless in not knowing, that they were prohibited from trading on the basis of this confidential market information, but nonetheless negotiated, yielding to the plaintiff and other class members their iQIYI shares before the news broke from Archegos and iQIYI shares have plummeted.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is recognized as one of the leading firms in the areas of corporate, securities and antitrust litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class actions bar, Pomerantz was a pioneer in the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breach of fiduciary duty and professional misconduct. The firm has recovered numerous multi-million dollar damages on behalf of the members of the group. See www.pomlaw.com.

CONTACT:

Robert S. Willoughby

Pomerantz srl

[email protected]

888-476-6529 ext 7980

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SOURCE Pomerantz LLP

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