Maison Solutions ($MSS) Investor Settlement

The parties have reached an agreement to settle the case, but the terms are still being finalized. You can submit your application now, and it will be processed once claims filing opens.

C.D. California

Court

2:24-cv-00063

Case number

10/05/2023

Class period Start

12/15/2023

Class period End

Maison Solutions reached a tentative settlement to resolve investor claims tied to alleged undisclosed related-party dealings, prior allegations involving its CEO and related entities, and other risks tied to its IPO disclosures.

Outline:

On October 5, 2023, Maison went public at $4.00 per share and said it would use IPO proceeds to expand its grocery business and complete acquisitions tied to CEO John Xu. Investors later claimed the company failed to disclose that vendor XHJC was a related party and omitted prior allegations linking Xu and related entities to an EB-5 visa fraud scheme. On December 15, 2023, Hindenburg published a report raising those issues and alleging stock promotion in WhatsApp chat rooms. $MSS fell 83.6% that day, and the case has now moved to a tentative settlement.

Timeline:
September 29, 2023: Maison’s registration statement for the IPO was declared effective.
October 5, 2023: Maison filed its final prospectus, sold 2.5 million shares at $4.00 per share, and began public trading.
November 22, 2023: Maison closed a private placement of 1,190,476 shares at $4.20 per share to two foreign individuals.
November 29, 2023: Maison filed a registration statement for the resale of up to 1,190,476 shares by certain selling shareholders.
December 11, 2023: Maison filed the prospectus related to the resale offering.
December 15, 2023: Hindenburg published a report alleging undisclosed related-party ties, prior visa-fraud allegations, and stock-promotion activity. $MSS fell 83.6%.
January 4, 2024: Investors filed the securities class action.
February 2026: The parties reached a tentative settlement
Background:

Maison is a specialty grocery retailer focused on Asian food and merchandise in the United States. After being founded in 2019, it acquired several supermarkets in the Los Angeles area and rebranded stores as HK Good Fortune Supermarkets or Hong Kong Supermarkets.

In October 2023, Maison completed its IPO at $4.00 per share and said the proceeds would help fund expansion and acquisitions. Those plans included acquiring 90% equity interests in the Alhambra Store from Grace Xu, the spouse of CEO John Xu, and in Dai Cheong from Xu himself by paying off SBA loans as part of the consideration.

Investors say the company’s disclosures left out important related-party information. In particular, they claim Maison described XHJC Holdings Inc. as a vendor and centralized supplier without disclosing that XHJC was also a related party.

The case also focuses on prior allegations involving Xu, J&C International Group, and Hong Kong Supermarkets. According to the source, a December 15, 2023 Hindenburg report said those parties had been accused of using supermarkets as a front to defraud the EB-5 visa program, and also alleged Maison’s stock was being promoted in WhatsApp chat rooms.

That report triggered a sharp market reaction. On December 15, 2023, $MSS fell 83.6% to close at $2.50 per share, far below its earlier trading levels and below the IPO price. The matter has now moved to a tentative settlement, although the available source does not state the amount or the next key dates.

What Can Investors Expect Now?

Maison Solutions reached a tentative settlement to resolve investor claims tied to alleged undisclosed related-party dealings, prior allegations involving its CEO and related entities, and other risks tied to its IPO disclosures.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.

Case Type

US Securities Class Action

Case Status

Tentative Settlement

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management,

Shareholder,

Investment Bank,

Service Provider

Security Type

Stocks

Trade Direction

Long

Filing date

01/04/2024

Lead Plaintiff Deadline

03/04/2024

Plaintiffs

Rick Green, Evgenia Nikitina

Attorneys

Glancy Prongay & Murray LLP (Los Angeles, CA), The Law Offices of Frank R. Cruz (Century City, CA)

Defendants

John Xu, Alexandria M. Lopez, Tao Han, Bin Wang, Mark Willis, Xiaoxia Zhang

Trades matching type

FIFO

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