Gaotu Techedu Inc (GSX) Manipulation Case

The court has denied the request to dismiss the case, allowing it to proceed.

E.D. New York

Court

1:22-cv-07966

Case number

03/05/2021

Class period Start

10/16/2023

Class period End

On May 18, 2020, GSX Techedu was accused by independent short-seller Muddy Waters of manipulating its financial accounts. The MW report stated that at least ~70% of GSX's users were fake.

On this news, the $GSX price dropped, and many market participants reasonably made the decision to open short positions at fundamentally inflated price levels.

Market participants suspect that following the dramatic increase in short interest GSX Techedu allegedly conspired with some big market players, including the notorious Archegos, to manipulate prices causing a short squeeze.

The short squeeze caused $GSX share price to jump 200% by Autumn 2020, despite continued accusations of accounting shenanigans and related lawsuits against the Company.

Taking all facts into account, Short Seller Market Participants have reasons to suspect $GSX, its officers, and certain hedge funds of conspiracy for market manipulation.

Case Status

Motion to dismiss denied

Alleged Offence

Price manipulation,

Insider Trading

Suspected Party

Directors,

Management,

Shareholder,

Influencer,

Investment Bank,

Service Provider,

Research Entity,

Hedge Fund

Security Type

Depository Securities (ADS, ADR, GDR)

Trade Direction

Short

Shock Event Date

05/18/2020

Filing date

12/30/2022

Judge

Pamela K. Chen