June 4, 2020
Bernstein Liebhard LLP announced today that the court appointed the Firm as co-lead counsel in a securities class action lawsuit pending in the United States District Court for the Eastern District of New York on behalf of those who purchased the securities of XP Inc. (“XP” or the “Company”) (NASDAQ: XP) issued in connection with XP’s December 2019 initial public offering (the “IPO” or “Offering”).
According to the initial complaint, the Registration Statement featured false and/or misleading statements and/or failed to disclose that: (1) XP engaged in undisclosed related party transactions; (2) XP failed to disclose its common and large system failures and connected losses; (3) XP’s aggressive Independent Financial Agent strategy was and is tenuous; (4) XP had material weaknesses; (5) XP fired its previous accounting firm due that firm finding and disclosing material weaknesses; and (6) as a result, defendants’ statements about XP’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
The truth was revealed on March 6, 2020 when the Winkler Group released a report detailing among other things how XP had misled shareholders and failed to disclose pertinent information generally and in its Registration Statement, including: (i) undisclosed related party transactions; (ii) R$100M in system failure expenses; (iii) great uncertainty with regards to its IFAs; (iv) the full circumstances regarding its firing and replacing its accounting firm KPMG for PwC; and (v) other undisclosed material weaknesses.
On this news, XP shares plummeted $9.12 per share over the rest of the trading day and the next full trading day, or 25.5% to close at $26.64 per share on March 9, 2020.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for twelve consecutive years.
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Laurence J. Hasson
Bernstein Liebhard LLP