BROOKLYN — A New York federal court allowed a putative securities class action to proceed against Gaotu, a Chinese online tutoring company, which allegedly misrepresented the impact that China’s after-school tutoring regulations would have on its business; such firms can no longer raise capital or go public. Notably, several of the company’s officials helm an advisory group for a foreign company that sold nearly $140 million in Gaotu stock, suggesting they were aware of how the regulations would affect the firm’s fortunes.
Read the ruling here.
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