Dong v. Cloopen Group Holding Limited et al
Case Summary
On December 10, 2021, Boyan Dong (“Plaintiff”), individually and on behalf of all others similarly situated, represented by Ralph M. Stone of Stone Law Group PLLC, filed a class action lawsuit against Cloopen Group Holding Limited (“Cloopen” or the “Company” or “Defendants”), seeking damages and injunctive relief for the alleged fraud and misleading statements made regarding the IPO. This case was filed in the U.S. District Court in the Southern District of New York.
Plaintiff brought this action as a class action pursuant to Federal Rules of Civil Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons who purchased or otherwise acquired Cloopen ADSs pursuant and/or traceable to the Registration Statement and/or purchased or otherwise acquired Cloopen securities between the Class Period, and who were damaged thereby (the “Class”).
In the complaint Plaintiff alleged that, “Cloopen claims to be the largest multi-capability cloud-based communications solution provider in China. The Company purportedly is the only Chinese provider that offers a full suite of cloud-based communications solutions covering communications platform as a service (CPaaS), cloud-based contact centers (cloud-based CC), and cloud-based unified communications and collaborations (cloud-based UC&C). In its February 2021 U.S. IPO, Cloopen sold 23 million ADSs (including the full exercise of the Underwriter Defendants’ over-allotment option) at $16 per ADS, netting approximately $342 million in proceeds from the offering.”
Plaintiff further alleged that, “the Registration Statement contained materially false and misleading statements of fact and failed to disclose facts required to be disclosed therein regarding Cloopen’s business, operations, and prospects. The Registration Statement led Cloopen ADS purchasers to believe that the Company’s much-touted growth strategy, which relied upon cross-selling, up-selling, optimizing existing solutions, and developing new features, was effective. In fact, Cloopen’s growth strategy was not working and its existing customers were abandoning the Company. The Company’s net retention rate had dropped well below the 94.7% rate reported for the nine months ended September 30, 2020.”
Plaintiff also alleged that, “Cloopen’s Registration Statement further failed to disclose that an increasing number of its customers were refusing to pay, forcing the Company to record massive increases in its accounts receivables and allowance for doubtful accounts. On March 26, 2021, just over six weeks after its IPO, Cloopen shocked the market when it published its 4Q 2020 and FY 2020 financial results, which closed on December 31, 2020, more than a month before the IPO. In response to this shocking news, the price of Cloopen’s ADSs fell 18.5%, dropping from $14.42 per ADS on March 25, 2021 to $11.75 per ADS on March 26, 2021. Yet, even then, Cloopen’s most senior officers continued to make materially false and misleading statements to the market and failed to reveal the true extent of Cloopen’s troubles.”
There are four claims for relief laid down by Plaintiff. The first claim deals with alleged violations of § 11 of the Securities Act against All Defendants, the second and third claims deal with alleged violations of § 15 of the Securities Act and of § 10(b) of the Exchange Act and Rule 10b-5, respectively. The last claim deals with alleged violation of § 20(a) of the Exchange Act.
In her prayer for relief, Plaintiff has requested the court for awarding compensatory damages in favor of Plaintiff and the other class members, rescission or a rescissory measure of damages, and an award of such equitable/injunctive or other relief as deemed appropriate by the Court.
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Case Details
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Case Number:
1:21-CV-10610
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Filing Date:
12/10/2021
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Case Status:
Pending - Other Pending
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Case Type:
Finance - Security/Commodity/Exchange
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Court:
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Courthouse:
Judge Details
Presiding Judge
John G. Koeltl
Party Details
Plaintiff
Boyan Dong
Defendants
Cloopen Group Holding Limited
Changxun Sun
Yipeng Li
Kui Zhou
Qingsheng Zheng
Xiaodong Liang
Zi Yang
Ming Liao
Feng Zhu
Lok Yan Hui
Jianhong Zhou
Ching Chiu
Xiegang Xiong
Cheng Luo
Yunhao Liu
COGENCY GLOBAL INC.
Colleen A. Devries
Goldman Sachs (ASIA) L.L.C.
Citigroup Global Markets Inc.
Attorney/Law Firm Details
Plaintiff Attorneys
Michael Ira Fistel, Jr.
Attorney at Johnson Fistel, LLP
40 Powder Springs St.
Marietta, GA 30064
Ralph M. Stone
Attorney at Stone Law Group PLLC
1700 Broadway, Ste 4100
New York, NY 10019
Defendant Attorneys
Ignacio E. Salceda
Attorney at Wilson Sonsini Goodrich & Rosati (CA)
650 Page Mill Road
Palo Alto, CA 94304
Sheryl Shapiro Bassin
Attorney at Wilson Sonsini Goodrich & Rosati (NYC)
1301 Avenue Of The Americas, 40Th Fl
New York, NY 10019
Joanna Andrea Diakos
Attorney at K&L Gates LLP (NYC)
599 Lexington Avenue
New York, NY 10022-6030
Todd G. Cosenza
Attorney at Willkie Farr & Gallagher LLP (NY)
787 Seventh Avenue
New York, NY 10019
Charles Dean Cording
Attorney at Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Other Attorneys
Jeremy Alan Lieberman
Attorney at Pomerantz LLP
600 Third Avenue, 20Th Floor
New York, NY 10016
Adam M. Apton
Attorney at Levi & Korsinsky, LLP
55 Broadway, 10Th Floor
New York, NY 10006
Gregory Bradley Linkh
Attorney at Glancy Prongay & Murray LLP
230 Park Avenue, Suite 358
New York, NY 10169
David Avi Rosenfeld
Attorney at Robbins Geller Rudman & Dowd LLP (LI)
58 South Service Road, Suite 200
Melville, NY 11747
Phillip C. Kim
Attorney at The Rosen Law Firm
275 Madison Avenue, 40Th Floor
New York, NY 10016
Thomas W. Elrod
Attorney at Kirby McInerney LLP
250 Park Avenue, Suite 820
New York, NY 10177
Albert Yong Chang
Attorney at Johnson Bottini, LLP
501 W. Broadway, Suite 1720
San Diego, CA 92101
Charles H. Linehan
Attorney at Glancy Prongay & Murray LLP
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Barbara A. Podell
Attorney at Berger & Montague, P.C.
1818 Market Street, Suite 3600
Philadelphia, PA 19103
Ira M. Press
Attorney at Kirby McInerney LLP
250 Park Avenue, Suite 820
New York, NY 10177
Michael C. Dell'Angelo
Attorney at Berger Montague PC
1818 Market Street, Suite 3600
Philadelphia, PA 19103
Court Documents
Exhibit C - Proposed Order
Exhibit B - Affidavit
Exhibit A - Certificate of Good Standing
Main Document
(#82) NOTICE OF APPEARANCE by Joanna Andrea Diakos on behalf of Cogency Global Inc., Colleen A. Devries..(Diakos, Joanna) (Entered: 05/03/2022)
(#81) STIPULATION AND ORDER STIPULATED SCHEDULING ORDER NO. 1: NOW, THEREFORE, the Parties stipulate and agree, subject to the approval of the Court, as follows: 1. Plaintiff's Consolidated Amended Complaint shall be filed on or before May 31, 2022; 2. Defendants shall answer or move as to Plaintiffs' Consolidated Amended Complaint on or before July 15, 2022; 3. In response to any Defendants' dispositive motion ("First Dispositive Motions") as to Plaintiff's Consolidated Amended Complaint, Plaintiff may file either a response or a Second Amended Complaint as follows : (a) Response to Dispositive Motion (i) If Plaintiff responds to Defendants' motion(s) due July 15, 2022, in lieu of filing a Second Amended Complaint, Plaintiff's response shall be filed on or before August 15, 2022; (ii) Defendants shall file any replies to Plaintiff's response on or before September 14, 2022. (b) (ii) Defendants shall file any replies to Plaintiff's response on or before Second Amended Complaint (i) If Plaintiff files a Second Amended Complaint in response to Defendants' motion(s) as to the May 31, 2022, Consolidated Amended Complaint, the Second Amended Complaint, before August 15, 2022 and Defendants First Dispositive Motions will be denied without prejudice as moot; (ii) Defendants shall answer or move as to Plaintiff's Second Amended Complaint on or before September 14, 2022; (iii) Plaintiffs shall respond to Defendants' motion(s) on or before October 14, 2022; and (iv) Defendants shall file any replies to Plaintiff's response on or before November 14, 2022. 4. If, while a dispositive motion in this case is pending, the Supreme Court of the State of New York issues a decision on the pending motion to dismiss in Sonny St. John v. Cloopen Group Holding Limited, No. 65261712021 (Sup. Ct., N.Y. Cnty.), a case with overlapping Section 11 and 15 claims pending against Cloopen, Goldman Sachs (Asia) L.L.C., Citigroup Global Markets Inc., Tiger Brokers (NZ) Limited, Futu Inc., and Cogency Global Inc., the Parties agree to meet and confer regarding the necessity for supplemental briefing in this action and to submit a proposal to this Court for the submission of supplemental briefing, if any. IT IS SO STIPULATED. (Signed by Judge John G. Koeltl on 4/19/2022) ( Motions due by 9/14/2022., Responses due by 10/14/2022, Replies due by 11/14/2022.) (ks) (Entered: 04/19/2022)
(#80) PROPOSED SCHEDULING ORDER. Document filed by Guozhang Wang..(Dell'Angelo, Michael) (Entered: 04/18/2022)
(#79) NOTICE OF APPEARANCE by Charles Dean Cording on behalf of Citigroup Global Markets Inc., Futu Inc., Goldman Sachs (ASIA) L.L.C., Tiger Brokers (NZ) Limited..(Cording, Charles) (Entered: 04/13/2022)
(#78) NOTICE OF APPEARANCE by Todd G. Cosenza on behalf of Citigroup Global Markets Inc., Futu Inc., Goldman Sachs (ASIA) L.L.C., Tiger Brokers (NZ) Limited..(Cosenza, Todd) (Entered: 04/13/2022)
(#9) REQUEST FOR ISSUANCE OF SUMMONS as to Tiger Brokers (NZ) Limited, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
(#8) REQUEST FOR ISSUANCE OF SUMMONS as to China International Capital Corporation Hong Kong Securities Limited, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
(#7) REQUEST FOR ISSUANCE OF SUMMONS as to Goldman Sachs (Asia) L.L.C., re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
(#6) REQUEST FOR ISSUANCE OF SUMMONS as to Colleen A. Devries, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
(#5) REQUEST FOR ISSUANCE OF SUMMONS as to Cogency Global Inc., re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
(#4) REQUEST FOR ISSUANCE OF SUMMONS as to Changxun Sun, Yipeng Li, Kui Zhou, Qingsheng Zheng, Xiaodong Liang, Zi Yang, Ming Liao, Feng Zhu, Lok Yan Hui, Jianhong Zhou, Ching Chiu, Xiegang Xiong, Cheng Luo, And Yunhao Liu, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
(#3) REQUEST FOR ISSUANCE OF SUMMONS as to Cloopen Group Holding Limited, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
(#2) CIVIL COVER SHEET filed..(Stone, Ralph) (Entered: 12/10/2021)
(#10) REQUEST FOR ISSUANCE OF SUMMONS as to FUTU Inc., re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
Docket Entries
- 05/06/2022
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Docket>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #83 MOTION for Barbara A. Podell to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number ANYSDC-26108688. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (vba) (Entered: 05/06/2022)
- 05/05/2022
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Docket(#83) MOTION for Barbara A. Podell to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number ANYSDC-26108688. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Guozhang Wang. (Attachments: #1 Exhibit A - Certificate of Good Standing, #2 Exhibit B - Affidavit, #3 Exhibit C - Proposed Order).(Podell, Barbara) (Entered: 05/05/2022)
- 05/03/2022
- View Court Documents
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Docket(#82) NOTICE OF APPEARANCE by Joanna Andrea Diakos on behalf of Cogency Global Inc., Colleen A. Devries..(Diakos, Joanna) (Entered: 05/03/2022)
- 04/19/2022
- View Court Documents
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Docket(#81) STIPULATION AND ORDER STIPULATED SCHEDULING ORDER NO. 1: NOW, THEREFORE, the Parties stipulate and agree, subject to the approval of the Court, as follows: 1. Plaintiff's Consolidated Amended Complaint shall be filed on or before May 31, 2022; 2. Defendants shall answer or move as to Plaintiffs' Consolidated Amended Complaint on or before July 15, 2022; 3. In response to any Defendants' dispositive motion ("First Dispositive Motions") as to Plaintiff's Consolidated Amended Complaint, Plaintiff may file either a response or a Second Amended Complaint as follows : (a) Response to Dispositive Motion (i) If Plaintiff responds to Defendants' motion(s) due July 15, 2022, in lieu of filing a Second Amended Complaint, Plaintiff's response shall be filed on or before August 15, 2022; (ii) Defendants shall file any replies to Plaintiff's response on or before September 14, 2022. (b) (ii) Defendants shall file any replies to Plaintiff's response on or before Second Amended Complaint (i) If Plaintiff files a Second Amended Complaint in response to Defendants' motion(s) as to the May 31, 2022, Consolidated Amended Complaint, the Second Amended Complaint, before August 15, 2022 and Defendants First Dispositive Motions will be denied without prejudice as moot; (ii) Defendants shall answer or move as to Plaintiff's Second Amended Complaint on or before September 14, 2022; (iii) Plaintiffs shall respond to Defendants' motion(s) on or before October 14, 2022; and (iv) Defendants shall file any replies to Plaintiff's response on or before November 14, 2022. 4. If, while a dispositive motion in this case is pending, the Supreme Court of the State of New York issues a decision on the pending motion to dismiss in Sonny St. John v. Cloopen Group Holding Limited, No. 65261712021 (Sup. Ct., N.Y. Cnty.), a case with overlapping Section 11 and 15 claims pending against Cloopen, Goldman Sachs (Asia) L.L.C., Citigroup Global Markets Inc., Tiger Brokers (NZ) Limited, Futu Inc., and Cogency Global Inc., the Parties agree to meet and confer regarding the necessity for supplemental briefing in this action and to submit a proposal to this Court for the submission of supplemental briefing, if any. IT IS SO STIPULATED. (Signed by Judge John G. Koeltl on 4/19/2022) ( Motions due by 9/14/2022., Responses due by 10/14/2022, Replies due by 11/14/2022.) (ks) (Entered: 04/19/2022)
- 04/18/2022
- View Court Documents
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Docket(#80) PROPOSED SCHEDULING ORDER. Document filed by Guozhang Wang..(Dell'Angelo, Michael) (Entered: 04/18/2022)
- 04/13/2022
- View Court Documents
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Docket(#79) NOTICE OF APPEARANCE by Charles Dean Cording on behalf of Citigroup Global Markets Inc., Futu Inc., Goldman Sachs (ASIA) L.L.C., Tiger Brokers (NZ) Limited..(Cording, Charles) (Entered: 04/13/2022)
- 04/13/2022
- View Court Documents
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Docket(#78) NOTICE OF APPEARANCE by Todd G. Cosenza on behalf of Citigroup Global Markets Inc., Futu Inc., Goldman Sachs (ASIA) L.L.C., Tiger Brokers (NZ) Limited..(Cosenza, Todd) (Entered: 04/13/2022)
- 04/12/2022
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Docket(#77) MEMO ENDORSEMENT on MOTION FOR LEAVE TO WITHDRAW AS COUNSEL granting #75 Motion to Withdraw as Attorney. ENDORSEMENT: APPLICATION GRANTED.. (Signed by Judge John G. Koeltl on 4/12/2022) Attorney David Avi Rosenfeld terminated (ks) (Entered: 04/12/2022)
- 04/12/2022
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Docket***NOTICE TO COURT REGARDING PROPOSED ORDER. Document No. #76 Proposed Order was reviewed and approved as to form. (km) (Entered: 04/12/2022)
- 04/11/2022
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Docket(#76) PROPOSED ORDER. Document filed by Ruoshui Sun. Related Document Number: #75 ..(Rosenfeld, David) Proposed Order to be reviewed by Clerk's Office staff. (Entered: 04/11/2022)
- 12/10/2021
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Docket(#10) REQUEST FOR ISSUANCE OF SUMMONS as to FUTU Inc., re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
- View Court Documents
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Docket(#9) REQUEST FOR ISSUANCE OF SUMMONS as to Tiger Brokers (NZ) Limited, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
- View Court Documents
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Docket(#8) REQUEST FOR ISSUANCE OF SUMMONS as to China International Capital Corporation Hong Kong Securities Limited, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
- View Court Documents
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Docket(#7) REQUEST FOR ISSUANCE OF SUMMONS as to Goldman Sachs (Asia) L.L.C., re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
- View Court Documents
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Docket(#6) REQUEST FOR ISSUANCE OF SUMMONS as to Colleen A. Devries, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
- View Court Documents
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Docket(#5) REQUEST FOR ISSUANCE OF SUMMONS as to Cogency Global Inc., re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
- View Court Documents
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Docket(#4) REQUEST FOR ISSUANCE OF SUMMONS as to Changxun Sun, Yipeng Li, Kui Zhou, Qingsheng Zheng, Xiaodong Liang, Zi Yang, Ming Liao, Feng Zhu, Lok Yan Hui, Jianhong Zhou, Ching Chiu, Xiegang Xiong, Cheng Luo, And Yunhao Liu, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
- View Court Documents
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Docket(#3) REQUEST FOR ISSUANCE OF SUMMONS as to Cloopen Group Holding Limited, re: #1 Complaint,,. Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
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Docket(#2) CIVIL COVER SHEET filed..(Stone, Ralph) (Entered: 12/10/2021)
- 12/10/2021
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Docket(#1) COMPLAINT against COGENCY GLOBAL INC., China International Capital Corporation Hong Kong Securities Limited, Ching Chiu, Citigroup Global Markets Inc., Cloopen Group Holding Limited, Colleen A. Devries, FUTU INC., Goldman Sachs (ASIA) L.L.C., Lok Yan Hui, Yipeng Li, Xiaodong Liang, Ming Liao, Yunhao Liu, Cheng Luo, Changxun Sun, Tiger Brokers (NZ) Limited, Xiegang Xiong, Zi Yang, Qingsheng Zheng, Jianhong Zhou, Kui Zhou, Feng Zhu. (Filing Fee $ 402.00, Receipt Number ANYSDC-25455176)Document filed by Boyan Dong..(Stone, Ralph) (Entered: 12/10/2021)
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