GDS.US
id: 1224
GDS Holdings (GDS) Investor Settlement
C.D. California
Court2:23-cv-04900
Case number13 Jul 2020
Class period Start03 Apr 2023
Class period EndGDS Holdings reached an agreement with $GDS investors to settle claims related to the CEO's undisclosed pre-paid forward sale contracts.
Case Details:
On April 4, 2023, GDS revealed that CEO William Wei Huang had entered into pre-paid forward sale contracts, which the company had not previously disclosed.
- GDS also stated that if Huang's ownership drops below 5%, it could alter the company’s share structure by converting Class B shares to Class A shares, thus ending the dual-class structure.
- This change might lead to early loan repayments, contractual issues, and regulatory problems.
On this news, $GDS fell by 3.99% on April 4, 2023.
Based on all these events, GDS was accused of the following points:
- The CEO engaged in undisclosed pre-paid forward sale contract transactions.
- If his ownership fell below 5%, it would trigger a change of control with potentially disastrous consequences for the company.
GDS reached an agreement with $GDS investors to settle claims related to the CEO's undisclosed pre-paid forward sale contracts.
Case Status
Stipulative Settlement
Alleged Offence
Mismanagement,
Misleading Statements,
Omissions
Suspected Party
Directors,
Management
Security Type
Depository Securities (ADS, ADR, GDR)
Trade Direction
Long
Filing date
21 June 2023
Plaintiffs
Larry Bergmann
Attorneys
The Rosen Law Firm, P.A. (Los Angeles, CA), The Schall Law Firm (Los Angeles, CA)
Defendants
William Wei Huang, Daniel Newman
Judge
Hon. John A. Kronstadt
Administrator
Strategic Claims Services
Settlement agreement date
2024-07-28
Trades matching type
FIFO
+$3,000,000
Cash Settlement Amount