Brown v. Qutoutiao Inc. — Entry #28

Case 1:20-cv-06707-VM      Document 144   Filed 02/05/26   Page 1 of 51


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
                                                                      2/5/2026

                                                     20 Cv. 6707 (VM)
    IN RE QUTOUTIAO, INC. SECURITIES
    LITIGATION                                       DECISION AND ORDER


    THIS DOCUMENT RELATES TO ALL ACTIONS


VICTOR MARRERO, United States District Judge.

        Lead   Plaintiff     James   Pappas1   (“Plaintiff”      or   “Lead

Plaintiff”) brought this consolidated class action against

Qutoutiao, Inc. (“QTT” or the “Company”), its officers and

directors2 (the “Individual Defendants,” and together with

QTT, the “Company Defendants”), and its underwriters3 (the


1 The Court notes that on July 8, 2025, Lead Counsel for the Class filed

a suggestion of death providing notice that Lead Plaintiff James Pappas
had died. (See Dkt. No. 129.). Following this notice, the Parties
exchanged pre-motion letters regarding Lead Counsel’s anticipated motion
to substitute Rosemary Korines pursuant to Federal Rule of Civil Procedure
25(a) (Dkt. Nos. 130-134). On August 18, 2025, the Court issued a Joint
Stipulation and Order pursuant to which the Parties stipulated that
Defendants would withdraw their letter opposition to the pre-motion letter
seeking the substitution of Rosemary Korines, the executor of James
Pappas’ estate, as Lead Plaintiff. (Dkt. No. 142.) Courts in this Circuit
have allowed the “substitution of a deceased shareholder-plaintiff by the
executors of his estate in a derivative action, holding that the executors
would possess ‘shareholder’ standing as long as the decedent did because
any shares owned by the decedent ‘passed into [his] estate by operation
of law.’” Roe v. City of New York, No. 00-CV-9062, 2003 WL 22715832, at
*3 (S.D.N.Y. Nov. 19, 2003) (quoting Saylor v. Bastedo, 623 F.2d 230,
237-38 (2d Cir. 1980)).
2 The Individual Defendants are Eric Tan (“Tan”), Lei Li (“L. Li”), Jingbo

Wang (“Wang”), Shaoqing Jiang (“Jiang”), Jianfei Dong (“Dong”), Oliver
Yucheng Chen (“Chen”), Yongbo Dai (“Dai”), James Jun Peng (“Peng”), and
Feng Li (“F. Li”).
3  The Underwriter Defendants are Citigroup Global Markets Inc.
(“Citigroup”), Deutsche Bank Securities Inc. (“Deutsche Bank”), China
Merchants Securities (HK) Co., Ltd. (“China Merchants”), UBS Securities


                                     1


Case 1:20-cv-06707-VM     Document 144     Filed 02/05/26   Page 2 of 51


“Underwriter    Defendants,”         and   together    with      the   Company

Defendants, the “Defendants”). Plaintiff, an investor in QTT,

asserts    claims   under      the    Securities      Act   of    1933     (the

“Securities Act”) for alleged misstatements and omissions in

connection with QTT’s initial public offering (“IPO”) in

September 2018 and its secondary public offering (“SPO,” and

together with the IPO the “Offerings”) in April 2019. (See

Dkt.   No.   118    [hereafter       “Second    Amended     Complaint”      or

“SAC”].)

       Defendants       QTT,   the     Individual       Defendants,         and

Citigroup, Deutsche Bank, China Merchants, UBS, Keybanc, and

Jefferies now move to dismiss the Second Amended Complaint in

its entirety for failure to state a claim pursuant to Federal

Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”). (See Dkt.

No. 122 [hereafter the “Motion” or “Mot.”].)4 For the reasons

discussed below, Defendants’ Motion is GRANTED.


LLC (“UBS”), Keybanc Capital Markets, Inc. (“Keybanc”), CLSA Limited
(“CLSA”), Haitong International Securities Company Limited (“Haitong”),
Jefferies Group LLC (“Jefferies”), and Lighthouse Capital International
Inc. (“Lighthouse”).
4 Three of the Underwriter Defendants, specifically, CLSA, Haitong, and
Lighthouse, entered into stipulations with Plaintiff preserving their
right to move to dismiss on other grounds if the Court denies this Motion
in whole or in part. (See Dkt. No. 121.) They did not join this Motion.


                                      2


Case 1:20-cv-06707-VM      Document 144         Filed 02/05/26        Page 3 of 51


                             I.     BACKGROUND5

       A.   FACTUAL BACKGROUND

       QTT operates mobile content platforms that distribute

and share entertainment content in China. The QTT smartphone

application (“QTT App”) aggregates articles and short videos

from professional media and freelancers and presents this

content in a customized feed for users. QTT generates the

majority of its revenue by selling advertisements on its

mobile platforms. QTT’s business model targeted consumers who

lived in smaller, provincial cities in China – known as lower

tier    cities   –   purportedly          because      this      underserved         but

growing market had increasing disposable income and spent

more time on the internet.

        Initially, QTT’s advertising business relied primarily

on     third-party        advertising          platforms         to      sell     QTT’s

advertising      spaces.     For    example,        Baidu,       another        Chinese

internet    company,       helped        QTT    sell     a    large       volume      of

advertisements       in    2016    and    2017.     In   February          2018,     QTT

acquired Dianguan, an advertising agent, for approximately


5The following facts are taken from Plaintiff’s Second Amended Complaint,
which the Court must take as true for the purpose of resolving Defendants’
motion to dismiss. See Safka Holdings LLC v. iPlay, Inc., 42 F. Supp. 3d
488, 491 (S.D.N.Y. 2013). Where indicated, the Complaint’s factual
allegations are supplemented by facts and information drawn from documents
appended to the Complaint, which are properly before the Court. See
Tannerite Sports, LLC v. NBCUniversal Media LLC, 135 F. Supp. 3d 219, 225
n.1 (S.D.N.Y. 2015).


                                          3


Case 1:20-cv-06707-VM   Document 144      Filed 02/05/26   Page 4 of 51


$2.3 million. QTT subsequently combined Dianguan’s existing

technology and its own resources into an in-house advertising

platform and reduced its reliance on third-party platforms

like Baidu.

      On September 14, 2018, QTT announced its IPO of 12

million American Depository Shares (“ADS”) at a price of $7.00

per   share.   On    September    11,   2018,    QTT   filed      its    final

amendment to the IPO Registration Statement with the SEC on

Form F-1/A, which was declared effective on September 13,

2018. On September 14, 2018, QTT filed its prospectus on Form

424B (“IPO Prospectus” and together with IPO Registration

Statement, the “IPO Offering Documents”). QTT closed its IPO

in September 2018.

      On March 29, 2019, QTT announced an SPO of 10 million

QTT ADSs at a price of $10.00 per share. On April 1, 2019,

QTT   filed    its   first   and    final     amendment      to    its    SPO

Registration    Statement    on    Form    F-1/A    (“SPO    Registration

Statement”), which was declared effective shortly thereafter.

On April 3, 2019, QTT filed its SPO Prospectus on Form 424B4

with the SEC. The SPO closed in April 2019 (“SPO Prospectus,”

and together with the SPO Registration Statement, the “SPO

Offering Documents”).

      On July 15, 2020, China Central Television (“CCTV”),

China’s state-controlled broadcaster, reported that certain


                                    4


Case 1:20-cv-06707-VM   Document 144    Filed 02/05/26    Page 5 of 51


advertisements placed by third-party advertising agents on

QTT’s platform were improper (the “CCTV Report”). As a result

of the CCTV Report, the price of the QTT’s ADSs fell by more

than 24 percent and the QTT App was temporarily removed from

several major app stores in China for two weeks, although the

QTT App was still available to existing users. In response,

QTT enacted several remedial measures to identify and remove

problematic     advertisements.    On    December        16,   2020,     QTT

reported a revenue decline for the third quarter of 2020,

with a 19.7 percent decline in year-over-year revenue and a

23.1 percent decline in advertising revenue. These third

quarter 2020 financials allegedly triggered a significant

share price decline.

      B.    THE PARTIES

      Plaintiff purchased ADSs in September 2018 pursuant or

traceable to QTT’s IPO and alleges he suffered damages arising

from federal securities law violations.

      The SAC names three types of defendants. The first is

the company QTT. The second are the Individual Defendants,

who are current or former employees of QTT. The third are the

Underwriter Defendants who underwrote either QTT’s IPO or

SPO, or both.

      The SAC names nine Individual Defendants, each of whom

allegedly participated in the preparation of, signed and/or


                                  5


Case 1:20-cv-06707-VM    Document 144     Filed 02/05/26   Page 6 of 51


authorized the signing of QTT’s IPO and/or SPO documents.

Specifically, the SAC names: (1) Tan, QTT’s co-founder and

its Chief Executive Officer (“CEO”) since May 20, 2019; (2)

L. Li, QTT’s co-founder and CEO until May 2019 when he

resigned from the Company; (3) Wang, a director at QTT and

the Company’s Chief Financial Officer (“CFO”) until January

22, 2020; (4) Jiang, a director of QTT and a member of its

Audit Committee and Compensation Committee until September

13, 2019; (5) Dong, a director of QTT and Co-President of

QTT; (6) Chen, a director of QTT and QTT’s Chief Strategy

Officer from August 2018 to February 2020; (7) Dai, a director

of QTT beginning in November 2018; (8) Peng, a director of

QTT, a member of its Audit Committee and Nominating and

Corporate Governance Committee, and Chair of the Compensation

Committee; and (9) F. Li, a director of QTT.

      Lastly,   the     SAC   names   nine    Underwriter     Defendants,

specifically: (1) Citigroup, a multinational investment bank

and financial services corporation who served as underwriter

for QTT’s IPO and SPO; (2) Deutsche Bank, a financial services

institution that served as underwriter to QTT’s IPO and SPO;

(3) China Merchants, a China-based financial services company

that served as underwriter for QTT’s IPO; (4) UBS, which

provides   investment     banking     and    financial     services,      and

served as an underwriter for QTT’s IPO; (5) Keybanc, which


                                      6


Case 1:20-cv-06707-VM   Document 144      Filed 02/05/26   Page 7 of 51


provides   investment    advisory       services,    and     served   as   an

underwriter for QTT’s IPO; (6) CLSA, a capital markets and

investment group that served as an underwriter for QTT’s SPO;

(7) Haitong, an international financial institution that

served as an underwriter for QTT’s SPO; (8) Jefferies, an

investment banking firm that served as underwriter for QTT’s

SPO; and (9) Lighthouse, a boutique investment bank that

served as underwriter for QTT’s SPO.

      C.    PROCEDURAL HISTORY

      On August 20, 2020, Plaintiff initiated this action

against    QTT   and    multiple        individual     and     underwriter

defendants, bringing claims alleging violations of Sections

11 (“Section 11”) and 15 (“Section 15”) of the Securities

Act, and Sections 10(b) and (20)(a) of the Securities Exchange

Act of 1934 (the “Exchange Act”).6 (See Dkt. No. 1.) On

November 4, 2020, Judge Sidney Stein, who originally presided

over this action, consolidated this case with action No. 20-

CV-7717 and named James Pappas as lead plaintiff. (See Dkt.

No. 22.) On January 15, 2021, Plaintiff filed an Amended

Complaint, which added claims alleging violations of Section


6 Specifically, the individual defendants were Tan, L. Li, Wang, Jiang,
Dong, and Chen. The underwriter defendants were China Merchants,
Citigroup, Deutsche, KeyBanc, and UBS.


                                    7


Case 1:20-cv-06707-VM        Document 144      Filed 02/05/26   Page 8 of 51


12(a)(2) (“Section 12(a)(2)”) of the Securities Act. (See

Dkt. No. 41.)

        On March 16, 2021, Defendants moved to dismiss the

Amended Complaint under Rule 12(b)(6) for failure to state a

claim. (See Dkt. Nos. 49, 53.) On August 3, 2023, Judge Stein

ruled    in    favor    of    Defendants      and    dismissed       the   Amended

Complaint in its entirety. (See Dkt. No. 108.) Judge Stein

concluded that Plaintiff had not adequately pleaded that

Defendants had made misstatements or omissions of material

fact in violation of the Exchange Act. (See id.) Judge Stein

also found that Plaintiff’s Securities Act claims sounded in

fraud and thus were subject to a heightened pleading standard

under Federal Rule of Civil Procedure Rule 9(b) (“Rule 9(b)”).

(See    id.)   Applying       the    Rule     9(b)   standard,       Judge   Stein

dismissed      the     Securities     Act     claims    because      Plaintiff’s

allegations were not pleaded with sufficient particularity as

to each Defendant. (See id.)

        Plaintiff appealed only the dismissal of the Securities

Act claims, arguing that Judge Stein erred in applying the

Rule 9(b) pleading standard. The Second Circuit agreed and

vacated the district court’s dismissal of the Securities Act

claims. (See Dkt. No. 113.) The Second Circuit explained that

Plaintiff’s      Securities         Act   claims     sounded    in    negligence

rather than fraud and thus were subject to review under the


                                          8


Case 1:20-cv-06707-VM   Document 144     Filed 02/05/26    Page 9 of 51


Rule    8(a)   notice    pleading       standard,    not     Rule    9(b)’s

heightened pleading standard. (See id.) The Second Circuit

declined to address whether Plaintiff’s Securities Act claims

were sufficiently pleaded under Rule 8(a) and stated that the

parties’   other    arguments    remained     available      to     them   on

remand. (See id.)

       On remand, this action was reassigned to this Court.

Plaintiff subsequently filed the Second Amended Complaint,

bringing claims under Sections 11, 12(a)(2), and 15 of the

Securities Act, and no longer asserting claims under the

Exchange Act. Defendants filed their motion to dismiss7 with

an accompanying memorandum of law, (“Defs.’ Mem.,” Dkt. No.

123), to which Plaintiff filed an opposition, (“Pl.’s Opp’n,”

Dkt. No. 131) and Defendants filed a reply (“Defs.’ Reply,”

Dkt. No. 143).


7 In support of their motion to dismiss, Defendants filed a declaration
with multiple documents included as exhibits, including excerpts of SEC
filings and a Wolfpack Research Report. (See Dkt. No. 124.) The Court
takes judicial notice of these documents as matters properly considered
at the pleading stage. See ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493
F.3d 87, 98 (2d Cir. 2007) (“[W]e may consider any written instrument
attached to the complaint, statements or documents incorporated into the
complaint by reference, legally required public disclosure documents
filed with the SEC, and documents possessed by or known to the plaintiff
and upon which it relied in bringing the suit.”); Staehr v. Hartford Fin.
Servs. Grp., Inc., 547 F.3d 406, 425 (2d Cir. 2008) (“[I]t is proper to
take judicial notice of the fact that press coverage, prior lawsuits, or
regulatory filings contained certain information, without regard to the
truth of their contents.”).


                                    9


Case 1:20-cv-06707-VM     Document 144      Filed 02/05/26   Page 10 of 51


                         II.   STANDARD OF REVIEW

         “To survive a motion to dismiss, a complaint must contain

 sufficient factual matter, accepted as true, to ‘state a claim

 to relief that is plausible on its face.’” Ashcroft v. Iqbal,

 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,

 550 U.S. 544, 570 (2007)). A claim is plausible if the

 complaint     states    “‘enough    fact      to    raise    a   reasonable

 expectation that discovery will reveal evidence of illegal’

 conduct” — there is not “a probability requirement at the

 pleading stage.” Lynch v. City of New York, 952 F.3d 67, 75

 (2d Cir. 2020) (quoting Twombly, 550 U.S. at 556); see Iqbal,

 556 U.S. at 678 (“A claim has facial plausibility when the

 plaintiff pleads factual content that allows the court to

 draw the reasonable inference that the defendant is liable

 for the misconduct alleged.”). “In other words, a complaint

 should     not   be    dismissed    when     the    factual      allegations

 sufficiently ‘raise a right to relief above the speculative

 level.’” Liboy v. Russ, No. 22-CV-10334, 2023 WL 6386889, at

 *4 (S.D.N.Y. Sept. 29, 2023) (quoting Twombly, 550 U.S. at

 555).

         In reviewing a motion to dismiss under Rule 12(b)(6),

 the Court must “constru[e] the complaint liberally, accepting

 all factual allegations in the complaint as true, and drawing

 all     reasonable     inferences    in      the    plaintiff’s      favor.”


                                     10


Case 1:20-cv-06707-VM    Document 144     Filed 02/05/26   Page 11 of 51


 Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008) (citation

 omitted). The Court may also “consider documents attached to

 the pleadings, documents referenced in the pleadings, or

 documents that are integral to the pleadings in order to

 determine if a complaint should survive a [Rule] 12(b)(6)

 motion.” Garcia v. Lewis, No. 05-CV-1153, 2005 WL 1423253, *3

 (S.D.N.Y. June 16, 2005); see also ATSI Commc’ns, Inc. v.

 Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (“[W]e may

 consider any written instrument attached to the complaint,

 statements or documents incorporated into the complaint by

 reference, legally required public disclosure documents filed

 with the SEC, and documents possessed by or known to the

 plaintiff and upon which it relied in bringing the suit.”).

                            III. DISCUSSION

      Plaintiff brings Counts I, II, and III under Sections

 11, 12(a)(2), and 15 of the Securities Act, respectively.

 (See SAC ¶¶ 137-65.) Plaintiff argues that QTT’s IPO Offering

 Documents   and   SPO    Offering      Documents     (collectively        the

 “Offering Documents”) contained material misstatements and

 omissions of fact that caused financial losses to Plaintiff

 and other investors. Plaintiff’s allegations regarding such

 misstatements and omissions of material fact generally fall

 into the following categories: (1) QTT misrepresented that it

 had an effective screening program to prevent the placement


                                     11


Case 1:20-cv-06707-VM      Document 144     Filed 02/05/26     Page 12 of 51


 of illegal advertisements on the QTT app, including the use

 of artificial intelligence to screen advertisements (id. ¶¶

 107-08, 122); (2) QTT omitted from the Offering Documents

 that it was actively placing a material amount of illegal

 advertisements on the QTT app at the time of the IPO and SPO

 (id. ¶¶ 109-11, 125-27); (3) a material amount of QTT’s

 revenue      growth   came    from    placing     illegal     advertisements

 rather than from a strategy of targeting underserved users in

 lower tier cities (id. ¶¶ 8, 99-101, 116-17); and (4) QTT

 failed to disclose certain related party transactions (id. ¶¶

 48-66).

        In response, Defendants argue that: (1) Plaintiff does

 not have statutory standing to bring a claim under Section 11

 as to the SPO and Section 12(a)(2); and (2) Plaintiff has

 failed to state a claim under the Securities Act because none

 of     the   challenged      statements     are       materially    false     or

 misleading. (See Defs.’ Mem. at 1-4.)

        Regarding standing, the Court finds that while Plaintiff

 does have standing to bring his claims against the Defendants

 involved in the IPO, he does not have Article III standing to

 bring his claims against the Defendants involved only in the

 SPO. Additionally, the Court finds that Plaintiff does not

 have    statutory     standing   to    bring      a   claim   under    Section

 12(a)(2). Addressing the substance of Plaintiff’s claims, the


                                       12


Case 1:20-cv-06707-VM   Document 144    Filed 02/05/26   Page 13 of 51


 Court finds that Plaintiff has failed to state a claim under

 the Securities Act because none of the challenged statements

 are materially false or misleading. Accordingly, for the

 reasons discussed below, the Court will grant Defendants’

 Motion.

      A.    STANDING

      Defendants argue that Plaintiff does not have statutory

 standing to bring a claim under Section 11 as to the SPO and

 Section   12(a)(2).    (See   Defs.’   Mem.   at   25-27.)    Plaintiff

 argues that he has standing to bring all the claims asserted

 in this action and that the law of the case doctrine prevents

 this Court from reconsidering Judge Stein’s prior holding

 that Plaintiff had standing. (See Pl.’s Opp’n at 24-25.)

      As an initial matter, the “[l]aw of the case doctrine is

 prudential and discretionary in character, and courts ‘always

 [have] the power to change a ruling” in light of ‘further

 reflection[.]’” Laurent v. PricewaterhouseCoopers LLP, 963 F.

 Supp. 2d 310, 314 (S.D.N.Y. 2013) (quoting Corporacion de

 Mercadeo Agricola v. Mellon Bank Int’l, 608 F.2d 43, 48 (2d

 Cir.1979) (internal citations omitted); see also American

 Hotel Int’l Grp., Inc. v. OneBeacon Ins. Co., 611 F. Supp. 2d

 373, 379 (S.D.N.Y. 2009), aff’d, 374 F. App’x 71 (2d Cir.

 2010) (“[W]hen an appellate court does not address an issue

 that a trial court decided, the trial court on remand has the


                                  13


Case 1:20-cv-06707-VM       Document 144        Filed 02/05/26    Page 14 of 51


 discretion to determine whether its prior determination on an

 issue should be disturbed.”).

        In this matter, the Second Circuit explicitly stated

 that    it    did   “not    reach       the    parties’    other     arguments,”

 including arguments as to standing, “all of which remain

 available to them on remand.” (Dkt. No. 113 at 8.) Given the

 discretionary nature of the law of the case doctrine and the

 Second Circuit’s implication that the standing argument would

 remain       available     on     remand,       the    Court      will     address

 Defendants’         arguments      regarding          Plaintiff’s        standing,

 beginning with whether Plaintiff has standing to bring the

 Section 11 claim as to the SPO.

               1.     Standing for the Section 11 Claim

        Regarding standing to assert the Section 11 claim as to

 the    SPO,    Defendants       argue    the    Plaintiff       lacks    statutory

 standing because he cannot trace his shares to the SPO. (See

 Defs.’ Mem. at 25-27.) Specifically, Defendants contend that

 because Plaintiff purchased his QTT shares in September 2018,

 six months before the April 2019 SPO, his shares are not

 traceable to that SPO, as is required to claim statutory

 standing under Section 11. (See id.) Plaintiff argues that

 under Federal Rule of Civil Procedure 23 (“Rule 23”), a

 plaintiff can litigate injuries on behalf of putative class

 members. (See Pl.’s Opp’n at 24-25.)


                                          14


Case 1:20-cv-06707-VM   Document 144    Filed 02/05/26    Page 15 of 51


       In making these arguments, Plaintiff and Defendants

 appear to be speaking past one another. Defendants’ argument

 concerns whether Plaintiff has statutory standing, while

 Plaintiff’s     argument   that   Rule      23   gives    him    standing

 implicates the distinct concept of class action standing. To

 properly address the standing issue, and before turning to

 statutory standing, the Court will first analyze whether

 Plaintiff has sufficiently established Article III standing

 and the related concept of class standing.

                  a. Article III Standing

       “The   ‘threshold    question    in   every   federal     case’     is

 ‘whether the plaintiff has made out a case or controversy

 between [themselves] and the defendant within the meaning of

 [Article] III.” Won v. Amazon.com Servs. LLC, No. 21-CV-2867,

 2025 WL 2962616, at *5 (E.D.N.Y. Oct. 21, 2025) (quoting

 Denney v. Deutsche Bank AG, 443 F.3d 253, 263 (2d Cir. 2006)).

 Article III “[s]tanding in the class action context requires

 a bifurcated inquiry.” Petrosino v. Stearn’s Prod., Inc., No.

 16-CV-7735, 2018 WL 1614349, at *5 (S.D.N.Y. Mar. 30, 2018).

 As part of this bifurcated inquiry, courts in this Circuit

 first examine whether the individual plaintiff has satisfied

 the   minimum    requirements     of   “traditional”       Article       III

 standing before determining whether the plaintiff has class


                                   15


Case 1:20-cv-06707-VM    Document 144    Filed 02/05/26   Page 16 of 51


 standing.   See   id.   (“First,   Plaintiff      must   establish       the

 minimum requirements of Article III standing[.]”).

      To establish “traditional” Article III standing, an

 individual plaintiff must have “(1) suffered an injury in

 fact, (2) that is fairly traceable to the challenged conduct

 of the defendant, and (3) that is likely to be redressed by

 a favorable judicial decision.” Spokeo, Inc. v. Robins, 578

 U.S. 330, 338 (2016), as revised (May 24, 2016) (citing Lujan

 v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992)). “In

 the context of class actions, Article III standing requires

 that ‘for every named defendant there must be at least one

 named plaintiff who can assert a claim directly against that

 defendant.’” Youngers v. Virtus Inv. Partners Inc., 195 F.

 Supp. 3d 499, 510 (S.D.N.Y. 2016) (quoting NECA-IBEW Health

 & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 159 (2d

 Cir. 2012)). If that requirement is satisfied, the inquiry

 shifts to a class standing analysis. See Point12 Diversified

 Fund, LP v. TMC The Metals Co., No. 21-CV-5991, 2025 WL

 1920340, at *9 (E.D.N.Y. July 11, 2025) (“In putative class

 actions, the standing analysis does not stop there. After

 ‘traditional’ Article III standing has been established,

 [courts] consider ‘class standing’ — that is, the named

 plaintiff[‘s]


                                    16


Case 1:20-cv-06707-VM         Document 144       Filed 02/05/26        Page 17 of 51


 ability (and incentive) to press the claims of absent class

 members.”)

       Here, the Plaintiff can satisfy “traditional” Article

 III standing for the Section 11 claim for some, but not all

 Defendants.       Plaintiff        plausibly      alleges        a    monetary        loss

 caused by his investment in QTT securities that could be

 redressed through rights of action for damages under Section

 11. However, for causation, his injury is fairly traceable

 only to the alleged misstatements and omissions by Defendants

 involved     in   the    IPO.      Plaintiff      purchased           QTT   securities

 related to the IPO only in September 2018. Therefore, his

 injury   can      be    “fairly     traceable”        only       to     the   material

 misstatements and omissions made by the Defendants involved

 in the IPO. Spokeo, 578 U.S. at 338. Since Plaintiff did not

 purchase shares of the SPO, which took place months later in

 April 2019, his injury could not have been caused by the

 material misstatements and omissions made only by Defendants

 involved in the SPO.

       Therefore, while Plaintiff has Article III standing to

 pursue claims against Defendants involved in the IPO, he does

 not   have   Article         III   standing      to   pursue         claims    against

 Defendants who were involved only in the SPO. Because “for

 every named defendant there must be at least one named

 plaintiff     who      can   assert    a    claim     directly          against       that


                                            17


Case 1:20-cv-06707-VM   Document 144   Filed 02/05/26   Page 18 of 51


 defendant,” the Section 11 claims must be dismissed as to the

 Defendants who were involved only in the SPO. See NECA, 693

 F.3d at 159 (quoting Cent. States Se. & Sw. Areas Health &

 Welfare Fund v. Merck–Medco Managed Care, L.L.C., 504 F.3d

 229, 241 (2d Cir. 2007)). Specifically, Plaintiff does not

 have standing against the individuals Dai, Peng, and F. Li,

 and underwriters Haitong, Jefferies, CLSA, and Lighthouse

 since these defendants were alleged to be involved only in

 the SPO and had no involvement in the IPO in which Plaintiff

 actually purchased shares. (See SAC ¶¶ 23-47.) The remaining

 Defendants are those who had involvement in the IPO, which

 includes some Defendants who were involved in both the IPO

 and SPO Offerings. Because this litigation entails a class

 action, the next step in the bifurcated Article III standing

 inquiry is to address class standing as to the remaining

 Defendants.

                  b. Class Standing

      “After   ‘traditional’     Article    III   standing     has      been

 established, [courts] consider ‘class standing’ — that is,

 the named plaintiff[‘s] ability (and incentive) to press the

 claims of absent class members.” Point12 Diversified Fund,

 2025 WL 1920340, at *9. Through class standing a “named

 plaintiff may bring claims on behalf of unnamed class members

 for a different violation of the same statute upon which the


                                  18


Case 1:20-cv-06707-VM         Document 144   Filed 02/05/26    Page 19 of 51


 named plaintiff rests his claims if that plaintiff ‘plausibly

 alleges (1) that he personally has suffered some actual injury

 as   a    result      of    the   putatively    illegal      conduct   of      the

 defendant, and (2) that such conduct implicates the same set

 of concerns as the conduct alleged to have caused injury to

 other members of the putative class by the same defendants.’”

 Lozada v. TaskUs, Inc., 710 F. Supp. 3d 283, 312–13 (S.D.N.Y.

 2024) (quoting NECA, 693 F.3d at 162). “Conduct ‘implicates

 the same set of concerns’ when the conduct that injured the

 named plaintiff and the conduct that injured the absent class

 members can be proven in a similar way” against the same

 defendants. In re Bibox Grp. Holdings Ltd. Sec. Litig., 534

 F. Supp. 3d 326, 335 (S.D.N.Y. 2021) (quoting NECA, 693 F.3d

 at 163).

          Here,   as        discussed   above,    it    has     already        been

 established that Plaintiff has Article III standing as to a

 Section 11 claim for the defendants involved in the IPO, but

 not for those involved in the SPO. However, some of these

 Defendants involved in the IPO were also involved in the SPO.

 Specifically, Defendants QTT, L. Li, Wang, Jaing, Dong, Chen,

 Citigroup, and Deutsche Bank were involved in both the IPO

 and SPO Offerings. The question then is whether Plaintiff,

 having the necessary individual standing to bring a Section

 11 claim as to the Defendants involved in the IPO, can bring


                                        19


Case 1:20-cv-06707-VM   Document 144     Filed 02/05/26   Page 20 of 51


 claims   on   behalf   of   the   unnamed    putative    class    members

 relating to the SPO against the Defendants involved in both

 Offerings.

      The misstatements and omissions made in the IPO and SPO

 are sufficiently similar to plead class standing for the

 Section 11 claim as to the SPO for Defendants involved in

 both Offerings. While there are slight differences in wording

 between the alleged misstatements in the IPO and SPO Offering

 Documents, they raise the “same set of concerns[.]” NECA, 693

 F.3d at 162; see also Langan v. Johnson & Johnson Consumer

 Companies, Inc., 897 F.3d 88, 94 (2d Cir. 2018)(“[N]on-

 identical injuries of the same general character can support

 standing.”). Plaintiff would need to rely on substantially

 similar evidence to show that the misstatements and omissions

 contained in both the IPO and SPO relating to QTT’s corporate

 strategy and business decisions, financial results, and its

 alleged failure to disclose related party transactions were

 materially    misleading.     Because     Plaintiff      has   plausibly

 alleged that he “(1) personally has suffered some actual

 injury as a result of the putatively illegal conduct of the

 defendant,” and (2) the conduct “implicates the same set of

 concerns as the conduct alleged to have caused injury to other

 members of the putative class by the same defendants,” class

 standing as to the Section 11 SPO claims relating to the


                                    20


Case 1:20-cv-06707-VM     Document 144      Filed 02/05/26    Page 21 of 51


 Defendants involved both Offerings is proper. NECA, 693 F.3d

 at 162 (internal citations and ellipsis omitted).

                   c. Statutory Standing

       Distinct from “traditional” Article III standing and the

 related “class standing” inquiry is statutory standing, which

 asks whether the plaintiff’s claims fall within the scope of

 a   statute.    See    Lexmark   Intern.,      Inc.   v.    Static    Control

 Components, Inc., 572 U.S. 118, 128 n.4 (2014). Statutory

 standing arguments are more “about the scope of the cause of

 action because they do not, as standing does, go to [the]

 Court’s subject matter jurisdiction.” Lozada, 710 F. Supp. 3d

 at 311 n.19.

       Here, the Defendants challenge Plaintiff’s statutory

 standing to bring certain claims under the Securities Act.

 Specifically,     the     Defendants         allege   that     because       the

 Plaintiff did not purchase shares from the SPO, his claims

 are not traceable to that offering as is required under

 Section   11.    “To    bring    a   claim    under   [Section]      11,     the

 securities held by the plaintiff must be traceable to the

 particular registration statement alleged to be false or

 misleading.” Slack Techs., LLC v. Pirani, 598 U.S. 759, 768

 (2023). While Defendants’ analysis is correct in the context

 of individual standing, the Plaintiff here has class standing

 as to certain Defendants.


                                       21


Case 1:20-cv-06707-VM   Document 144    Filed 02/05/26   Page 22 of 51


      As discussed above, Plaintiff has class standing to

 bring a Section 11 claim as to the SPO on behalf of the

 unnamed putative class members against Defendants QTT, L. Li,

 Wang, Jaing, Dong, Chen, Citigroup, and Deutsche Bank, who

 were all involved in both the IPO and SPO offerings. While

 Plaintiff does not have individual statutory standing against

 these defendants to make a Section 11 claim as to the SPO,

 this circumstance does not constitute a material issue, as

 class standing allows him to pursue claims on behalf of the

 unnamed putative class members who can satisfy Section 11

 statutory   standing    by   tracing    their     securities     to     the

 statements in the SPO Offering Documents. Thus, the fact that

 Plaintiff does not individually have statutory standing for

 the SPO claim is remedied by class standing, which allows the

 Plaintiff to pursue the Section claim on behalf of unnamed

 putative class members as to the SPO. See NECA 693 F.3d at

 158 (finding class standing applied even where plaintiff did

 not individually have statutory standing to pursue certain

 claims).

             2.   Section 12(a)(2) Statutory Standing

      Section 12(a)(2) of the Securities Act grants purchasers

 of securities an express cause of action against sellers who

 make material misstatements or omissions “by means of a

 prospectus.” 15 U.S.C. § 77l(a)(2). In the context of Section


                                  22


Case 1:20-cv-06707-VM     Document 144      Filed 02/05/26    Page 23 of 51


 12(a)(2), the word “‘prospectus’ is a term of art referring

 to a document that describes a public offering of securities

 by an issuer or controlling shareholder.” Gustafson v. Alloyd

 Co., 513 U.S. 561, 584 (1995). Thus, to have statutory

 standing    under    Section     12(a)(2),        “plaintiffs     must       have

 purchased   securities        directly     from     the    defendants”   in    a

 “public offering[].” Freidus v. Barclays Bank PLC, 734 F.3d

 132, 141 (2d Cir. 2013); see In re Smart Techs. Inc. S’holder

 Litig., 295 F.R.D. 50, 57 (S.D.N.Y. 2013) (“It is well-settled

 that a plaintiff may maintain a section 12(a)(2) claim only

 where the plaintiff purchased securities directly in the

 initial public offering.”).

        Moreover, courts in this Circuit routinely find that

 “[p]laintiffs who purchased securities in a secondary market

 or aftermarket lack standing” to bring a Section 12(a)(2)

 claim. Garnett v. RLX Tech. Inc., 632 F. Supp. 3d 574, 614

 (S.D.N.Y. 2022); see also In re Sterling Foster & Co., Inc.,

 Sec.   Litig.,     222   F.   Supp.   2d     216,    244    (E.D.N.Y.    2002)

 (collecting cases finding that “purchasers in private or

 secondary   market       offerings    are     precluded       from   bringing

 actions under Section 12(a)(2)”). Here, Plaintiff concedes

 that he did not purchase QTT shares in the IPO or the SPO

 directly    from    Defendants.       (See    SAC     n.47.)    Accordingly,

 Plaintiff lacks statutory standing to bring a claim under


                                       23


Case 1:20-cv-06707-VM     Document 144         Filed 02/05/26   Page 24 of 51


 Section 12(a)(2). See In re HEXO Corp. Sec. Litig., 524 F.

 Supp.     3d    283,   305    (S.D.N.Y.       2021)       (dismissing     Section

 12(a)(2)       claim   for    lack    of     standing      because    the   named

 plaintiffs did not purchase the company’s shares during the

 IPO); In re Cosi, Inc. Sec. Litig., 379 F. Supp. 2d 580, 589

 (S.D.N.Y. 2005) (“[B]ecause the plaintiffs have not alleged

 that they have purchased their shares in the IPO, they have

 failed to allege that they have standing to bring a claim

 under [Section] 12(a)(2).”).

         Plaintiff relies on Langan v. Johnson & Johnson Consumer

 Companies, Inc., 897 F.3d 88 (2d Cir. 2018), to establish he

 has class standing for his Section 12(a)(2) claims because he

 has   standing     for   his       Section     11    claims    as    to   certain

 defendants.       To   that    extent      his      reliance   on    Langan    is

 misplaced. In Langan, the Second Circuit discussed how NECA

 stood for the proposition that “non-identical injuries of the

 same general character can support standing.” 897 F.3d at 94.

 It also reaffirmed, as NECA did, that “‘with respect to each

 asserted claim’ against each defendant, ‘a plaintiff must

 always    have    suffered     a     distinct       and   palpable    injury   to

 herself.’” Id. at 92. Class standing, as described in Langan

 and NECA, “does not stand for the sweeping proposition that

 an individual may represent absent class members with regard

 to claims as to which he or she has no individual standing[.]”


                                         24


Case 1:20-cv-06707-VM    Document 144   Filed 02/05/26   Page 25 of 51


 Yi Xiang v. Inovalon Holdings, Inc., 327 F.R.D. 510, 520

 (S.D.N.Y. 2018) (quoting Stadnick v. Vivint Solar, Inc., No.

 14-CV-9283, 2015 WL 8492757, at *17 (S.D.N.Y. Dec. 10, 2015),

 aff’d, 861 F.3d 31 (2d Cir. 2017)).

       “In NECA-IBEW Health & Welfare Fund, the Second Circuit

 allowed a plaintiff to bring claims on behalf of a class under

 the   same   statutes    regarding     different    prospectuses        and

 registration statements.” Lozada, 710 F. Supp. 3d at 313.

 “[I]t did not, however, allow the ability to bring class

 claims that stretch across different statutes.” Id.; see also

 Stadnick, 2015 WL 8492757, at *18 (“[P]laintiff here does not

 have statutory standing on his own right to pursue a claim

 under § 12(a)(2). Rather than expanding from his own statutory

 standing to represent a class of people with the same set of

 concerns,    plaintiff     instead     asserts     merely     that      the

 similarity between claims under § 11 and claims under §

 12(a)(2) is enough. It is not, and plaintiff’s lack of

 statutory standing for a § 12(a)(2) claim is dispositive.”).

       Here, Plaintiff “does not have statutory standing in his

 own right to pursue a claim under Section 12(a)(2).” Stadnick,

 2015 WL 8492757, at *18. Though Plaintiff does have class

 standing to pursue his Section 11 claim as to the SPO against

 certain Defendants, this class standing does not “stretch

 across different statutes” to Plaintiff’s Section 12(a)(2)


                                   25


Case 1:20-cv-06707-VM        Document 144         Filed 02/05/26        Page 26 of 51


 claims.      Lozada,       710   F.   Supp.           3d    at     313.       Therefore,

 “plaintiff’s lack of statutory standing for a § 12(a)(2) claim

 is dispositive.” Stadnick, 2015 WL 8492757, at *18. Because

 there is not a named plaintiff who has statutory standing to

 bring    the    Section      12(a)(2)      claim,          this    action       must     be

 dismissed. Having addressed standing, the Court now turns to

 the Plaintiff’s remaining claims, beginning with his Section

 11 claim.

         B.     SECTION 11

         “Section 11 establishes liability on the part of issuers

 of registration statements if ‘any part of the registration

 statement, when such part became effective, contained an

 untrue statement of a material fact or omitted to state a

 material fact required to be stated therein or necessary to

 make the statements therein not misleading.’” City of Pontiac

 Policemen’s & Firemen's Ret. Sys. v. UBS AG, 752 F.3d 173,

 182   (2d      Cir.    2014)     (quoting        15    U.S.C.          §    77k(a)).     “A

 misstatement          or   omission   is         material         if       ‘there   is    a

 substantial       likelihood       that      a     reasonable              person   would

 consider the stated or omitted facts important in deciding

 whether to buy or sell shares of stock.’” In re Hut 8 Corp.

 Sec. Litig., No. 24-CV-904, 2025 WL 2636150, at *12 (S.D.N.Y.

 Sept. 12, 2025) (quoting Operating Local 649 Annuity Trust

 Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86, 92–93 (2d


                                         26


Case 1:20-cv-06707-VM    Document 144       Filed 02/05/26   Page 27 of 51


 Cir. 2010) (internal quotation marks omitted)). “To state a

 claim under Section 11, the plaintiff must allege that: (1)

 [they] purchased a registered security, either directly from

 the issuer or in the aftermarket following the offering; (2)

 the   defendant     participated      in   the   offering        in   a   manner

 sufficient to give rise to liability under section 11; and

 (3) the registration statement ‘contained an untrue statement

 of a material fact or omitted to state a material fact

 required to be stated therein or necessary to make the

 statements therein not misleading.’” In re Morgan Stanley

 Info. Fund Sec. Litig., 592 F.3d 347, 358–59 (2d Cir. 2010)

 (quoting 15 U.S.C. § 77k(a)).              “Plaintiffs need not allege

 scienter, reliance, or causation.” City of Pontiac, 752 F.3d

 at 182.

       Typically,      “in     assessing     [Section]       11    claims,     we

 ‘conduct    a    preliminary     inquiry     into   whether       plaintiffs’

 allegations are premised on fraud,’ or merely on negligence,

 to determine the appropriate pleading standard.” Id. at 183

 (quoting In re Lehman Bros. Mortgage–Backed Sec. Litig., 650

 F.3d 167, 174 (2d Cir. 2011)). Here, however, the Second

 Circuit has already determined that Plaintiff’s allegations

 sound in negligence rather than fraud, making Rule 8 notice

 pleading the appropriate standard. (See Dkt. No. 113.) As

 discussed       previously,    Rule   8    requires    that      a    complaint


                                       27


Case 1:20-cv-06707-VM    Document 144      Filed 02/05/26   Page 28 of 51


 includes “enough facts to state a claim for relief ‘that is

 plausible on its face.’” Laguerre v. Related Mgmt. Co., No.

 25-CV-5594, 2025 WL 2998053, at *1 (S.D.N.Y. Oct. 24, 2025)

 (quoting Twombly, 550 U.S. at 570). To prevail, plaintiff

 must have alleged “factual content that allows the court to

 draw the reasonable inference that the defendant is liable for

 the misconduct alleged.” New Jersey Carpenters Health Fund v.

 Royal Bank of Scotland Grp., PLC, 709 F.3d 109, 120-21 (2d

 Cir. 2013) (quoting Iqbal, 556 U.S. at 678). “[F]actual

 content     that   is   ‘merely   consistent       with,’     rather       than

 suggestive of, a finding of liability will not support a

 reasonable inference.” Id. at 121 (quoting Twombly, 550 U.S.

 at 556). “Although not subject to Rule 9(b)’s heightened

 pleading standard, ‘the complaint must still allege a false

 or misleading statement or omission in more than conclusory

 terms.’” In re Hut 8, No. 24-CV-904, 2025 WL 2636150, at *11

 (quoting Harris v. AmTrust Fin. Servs., Inc., 135 F. Supp. 3d

 155, 170 (S.D.N.Y. 2015), aff’d, 649 F. App’x 7 (2d Cir.

 2016)).

      The SAC alleges multiple misstatements and omissions of

 material fact made in the Offering Documents. Specifically,

 the SAC alleges that (1) QTT misrepresented that it had an

 effective    screening    program    to    prevent     the   placement      of

 illegal advertisements on the QTT app, including the use of


                                     28


Case 1:20-cv-06707-VM         Document 144       Filed 02/05/26    Page 29 of 51


 artificial intelligence to screen advertisements (SAC ¶¶ 107-

 08, 122); (2) QTT omitted from stating in the Offering

 Documents that it was actively placing a material amount of

 illegal advertisements on the QTT app at the time of the IPO

 and SPO (id. ¶¶ 109-11, 125-27); (3) a material amount of

 QTT’s revenue growth came from placing illegal advertisements

 rather than from a strategy of targeting underserved users in

 lower tier cities (id. ¶¶ 8, 99-101, 116-17); and (4) QTT

 failed to disclose certain related party transactions (id. ¶¶

 48-66).      The     Court    will    address         each   of   these    alleged

 misstatements and omissions in turn.

               1.   QTT’s Statements Regarding the Screening of
               Illegal Advertisements

        The SAC alleges that QTT misled investors by stating in

 its    IPO    Offering        Documents        that    QTT    used    “artificial

 intelligence” and “deep learning methods” to “monitor and

 identify objectionable visual content with a high degree of

 accuracy” and flag “suspicious content for manual review.”

 (Id.   ¶     107).    According      to   Plaintiff,         these   claims       were

 misleading because they highlighted the effectiveness of

 QTT’s content screening technology without disclosing that

 the Company placed ads declined by the screening technology

 on the QTT app after a second manual review by QTT employees.

 (See id. ¶¶ 73, 108).


                                           29


Case 1:20-cv-06707-VM      Document 144         Filed 02/05/26    Page 30 of 51


         Defendants        argue     that        references           to     screening

 technology using “artificial intelligence” and “deep learning

 methods” referred not to the screening of advertisements, but

 to the screening of user content on the QTT app. (Defs.’ Mem.

 at 16-17.)

        Here,   the     Court      agrees       with    Defendants           that     the

 references to “artificial intelligence” referred not to the

 screening of advertisements, but to the screening of QTT’s

 core   content      for   consumers.          The   IPO   Offering          Documents

 contained      a      section     titled        “Advertising,”              that     was

 immediately followed by a separate section titled “Content

 Screening Technology.” (SAC ¶ 107.) The “Advertising” section

 discussed QTT’s use of technology to deliver targeted ads to

 users, making no mention of artificial intelligence and its

 implications for screening illegal ads. (Id.) In the very

 next section labeled “Content Screening Technology,” QTT

 described its use of “artificial intelligence” and “deep

 learning”      to     decline      and     flag       certain        objectionable

 “content.” (Id.) This context indicates that the artificial

 intelligence        technology     was     being      used      to    screen       user

 content, like news articles, rather than advertisements.

        While   Plaintiff        claims    that      QTT   itself          referred    to

 “advertising content” in the Offering Documents, those same

 documents      also     referred     to       “content       and      advertising”


                                          30


Case 1:20-cv-06707-VM     Document 144       Filed 02/05/26     Page 31 of 51


 separately in other locations, indicating that QTT viewed

 content and advertising as distinct concepts. (Id.; Dkt. No.

 124-12 at 16, 124-13 at 18.) Given that the statements

 regarding the use of artificial intelligence came in the

 “Content    Screening     Technology”        section,        rather   than     the

 immediately preceding “Advertising” section, no reasonable

 investor     could     have     plausibly      interpreted         Defendant’s

 statements to mean that QTT’s screening technology was used

 to screen advertisements.

             2.   QTT Did Not Disclose That It Was Placing
             Illegal Advertisements On the QTT App

       The   SAC   alleges       that   the     Offering       Documents        were

 materially false and misleading because they did not disclose

 to   investors    that    QTT    was    actively       violating       People’s

 Republic of China (“PRC”) advertising laws and regulations at

 the time those documents became effective. (See SAC ¶¶ 101,

 105, 109-11, 118, 121, 126-27.) To support that illegal ads

 were being placed on the platform at the time the Offering

 Documents became effective, Plaintiff points to confidential

 witness     allegations       regarding      the    placement         of   “non-

 conforming” ads on the QTT App, public reporting of illegal

 ads, a lawsuit filed against QTT regarding gambling ads, and

 a talk between QTT and a Chinese regulator. (Id. ¶¶ 72-75,

 88-95.) Plaintiff also argues that QTT’s risk disclosures


                                        31


Case 1:20-cv-06707-VM    Document 144     Filed 02/05/26    Page 32 of 51


 regarding illegal advertisements on the QTT App do not protect

 Defendants    from     liability   because    at   the     time   the      risk

 disclosures     were      made     QTT   “was      actively       violating

 [advertising] regulations.” (Pl.’s Opp’n at 11.) Defendants

 respond that QTT fully disclosed its illegal advertisement

 risks, including the risk that the Company could be currently

 violating PRC advertising laws and regulations at the time

 the disclosures were made. (Defs.’ Mem. at 12-15.)

      The Court finds that the SAC fails to allege that the

 Offering Documents contained materially false and misleading

 statements regarding the existence of illegal advertisements

 at the time the statements became effective because QTT fully

 disclosed the risk of illegal advertisements on the QTT App.

      In its Offering Documents, QTT disclosed the risk that

 illegal advertisements could appear on its platform. In the

 Offering Documents QTT expressly warned investors that it

 “cannot assure [investors] that all the advertisements shown

 on [its] mobile applications are true, accurate, appropriate

 and in full compliance with applicable laws and regulations.”

 (SAC ¶ 110.) This disclosure of risk is in the present tense.

 It tells investors that at the time the statements were made,

 QTT “cannot assure” that “all the advertisements” on the

 platform fully complied with PRC laws and regulations. (Id.)

 Though   “cautionary       words    about    future       risk”   are       not


                                     32


Case 1:20-cv-06707-VM      Document 144     Filed 02/05/26    Page 33 of 51


 sufficient      to   protect   against      risks     that   have      occurred

 already and are likely to occur again, the words used by QTT

 indicate that at the time of the disclosures, QTT could have

 been    in     active    violation    of   PRC    advertising       laws     and

 regulations. Van v. Bright Health Grp., Inc., No. 24-3132-

 CV, 2025 WL 3171688, at *3 (2d Cir. Nov. 13, 2025) (quoting

 Set Cap. LLC v. Credit Suisse Grp. AG, 996 F.3d 64, 85 (2d

 Cir. 2021)).

         Plaintiff states that the disclosures in this case are

 similar to the disclosures that the Second Circuit found

 inadequate in Meyer v. Jinkosolar Holdings Co., Ltd., 761

 F.3d 245, 250 (2d Cir. 2014). In that case, the Second Circuit

 found that the “failure to disclose then-ongoing and serious

 pollution violations” was actionable despite investors being

 “warned of a financial risk to the company from environmental

 violations.” Jinkosolar, 761 F.3d at 251. However, in that

 case,    the    defendant    had     submitted    a    report     to    Chinese

 Regulators       about    existing     problems       regarding     pollution

 violations. Id. The Court found that given the known existence

 of problems at the time the offering documents were published,

 the company’s “generic warning” of a risk that that non-

 compliance with environmental regulations may be costly would

 “not suffice when undisclosed facts on the ground would

 substantially affect a reasonable investor’s calculations of


                                       33


Case 1:20-cv-06707-VM     Document 144     Filed 02/05/26    Page 34 of 51


 probability.” Id. Here, Plaintiff does not identify any such

 self-disclosure or knowledge of ongoing violations by QTT.

         This case is more similar to Jiajia Luo v. Sogou, Inc.,

 465 F. Supp. 3d 393, 409–10 (S.D.N.Y. 2020), where the court

 found     that    the    company’s    disclosures          properly     warned

 investors that the company could not assure or guarantee that

 they were currently complying with the law. In Sogou, the

 offering documents included a statement that “[a]lthough we

 are committed to complying with . . . PRC laws and regulations

 applicable to Internet-related service . . . activities, we

 cannot guarantee that we are now or will in the future be in

 full compliance with any such laws and regulations that apply

 to our services and activities.”           465 F. Supp. 3d at 410. The

 court in that case found that because of the company’s risk

 disclosure, “no reasonable investor could infer that [the

 company’s] compliance efforts were particularly effective.”

 Id. Here, QTT similarly acknowledged the current and ongoing

 risk    that     it   “cannot   assure    [investors]        that     all   the

 advertisements shown on [QTT’s] mobile applications are true,

 accurate, appropriate and in full compliance with applicable

 laws and regulations.” (SAC ¶ 110.) Based on QTT’s risk

 disclosures, no reasonable investor could infer that QTT’s

 compliance efforts were currently effective.


                                      34


Case 1:20-cv-06707-VM   Document 144     Filed 02/05/26   Page 35 of 51


        Additionally, Plaintiff fails to allege any omission by

 Defendants    of   a   violation   of    PRC     advertising    laws     and

 regulations at the time of the IPO and SPO that would render

 QTT’s risk disclosure ineffective or misleading. Plaintiff

 attempts to support his argument that QTT knew it was placing

 illegal ads on its platform at the time the Offering Documents

 became effective in several ways. First, Plaintiff argues

 that    allegations     by   confidential        witnesses     support     a

 plausible    inference   that   QTT     placed    illegal    ads   on    the

 platform at the time of the Offerings. (See SAC ¶¶ 72-75.)

 Second, Plaintiff points to public reporting indicating that

 QTT had illegal advertisements on its platform. (See id. ¶¶

 88-89.) Third, Plaintiff claims there was a lawsuit filed

 against QTT’s Chinese entity Jifen in January 2019 regarding

 illegal gambling advertisements on the QTT app. (See id. ¶

 90.) Fourth, Plaintiff asserts that QTT was summoned for a

 talk regarding illegal advertisements on June 18, 2019, with

 the Shanghai Municipal Market Supervision Bureau, a Chinese

 regulator. (See id. ¶ 91.) The Court will address each of

 these allegations in turn.

        Plaintiff alleges that confidential witnesses support a

 plausible inference that QTT placed illegal advertisements on

 the QTT App at the time of the Offerings. Plaintiff identifies

 two confidential witnesses. The first is a channel manager at


                                    35


Case 1:20-cv-06707-VM    Document 144        Filed 02/05/26   Page 36 of 51


 Dianguan from June 2019 to September 2020 (“Former Channel

 Manager”). (See id. ¶¶ 72-73.) The Former Channel Manager

 claimed     that   while      QTT    used         technology     to    screen

 advertisements, if an advertisement that “toed the line” was

 screened out, the ads could be subject to a second manual

 review that would allow those “non-conforming” ads to be put

 on the platform. (Id. ¶¶ 71, 73.) The second confidential

 witness was a former sales director (“Former Sales Director”)

 of Dianguan from March 2019 to May 2020 who explained that

 the second manual review was conducted by two teams, one team

 that dealt with well-known and qualified advertisers and a

 second team that dealt with riskier, unqualified advertisers.

 (Id. ¶¶ 72, 74-75.) The Former Sales Director alleged that

 the second team dealing with the unqualified advertisers

 outsourced due diligence to outside contractors who often

 opened accounts for any advertiser without conducting the

 proper due diligence. (Id. ¶ 74.)

        “[T]he Court may properly take account of the alleged

 testimony of [a confidential witness] even though some of

 [their]     testimony    is    based        on     hearsay     and    indirect

 knowledge.” City of Warren Police & Fire Ret. Sys. v. World

 Wrestling Ent. Inc., 477 F. Supp. 3d 123, 132 (S.D.N.Y. 2020).

 “For    a   complaint   to    rely     on        information    provided     by

 confidential sources”, the source must be described in the


                                      36


Case 1:20-cv-06707-VM   Document 144   Filed 02/05/26   Page 37 of 51


 complaint with sufficient detail to “support the probability

 that a person in the position occupied by the source would

 possess   the   information   alleged.”    Id.   (quoting     Novak    v.

 Kasaks, 216 F.3d 300, 314 (2d Cir. 2000)). The question here

 is whether it is probable that the two confidential witnesses

 were in a position to possess information regarding the

 screening and placement of illegal advertisements by QTT at

 the time of the Offerings.

      The Court finds that the confidential witnesses are not

 described in the SAC in a manner sufficient to support the

 probability that they were in a position to possess the

 information alleged. First, the Former Channel Manager was

 hired after the April 2019 SPO and is not alleged to have

 worked on advertising at QTT. (SAC ¶ 72.) Given that the

 Former Channel Manager was not working at QTT at the time of

 either offering and did not work in advertising at QTT, they

 are not someone who “would possess the information alleged.”

 City of Warren, 477 F. Supp. 3d at 132. For the Former Sales

 Director, the SAC itself acknowledges that they “did not deal

 with unqualified advertisers,” and only learned “about how

 the Company dealt with those advertisers from co-workers.”

 (Id. ¶ 74.) These confidential witnesses’ allegations are

 based not on direct observations, but instead on “second-hand

 information, obtained only through intermediaries.” Janbay v.


                                  37


Case 1:20-cv-06707-VM      Document 144      Filed 02/05/26     Page 38 of 51


 Canadian Solar, Inc., 2013 WL 1287326, at *8 (S.D.N.Y. Mar.

 28,   2013).    Such     second-hand      information        undermines        “the

 likelihood     that      [the   confidential      witness]       had   personal

 knowledge of the allegations.” Id. Given these issues, the

 SAC does not “support the probability that a person in the

 position[s] occupied by the [confidential witnesses] would

 possess the information alleged.” City of Warren, 477 F. Supp.

 3d at 132.

       Even if the SAC properly described the confidential

 witnesses     as   occupying     positions      that     would    possess       the

 information alleged, the witnesses would still not allege

 that illegal advertisements were placed on the QTT App. The

 confidential witnesses speak of “risky,” advertisements that

 “toed the line.” (SAC ¶¶ 72-75.) However, nowhere does the

 SAC explicitly state that the confidential witnesses alleged

 that illegal advertisements were being placed on the QTT App.

 Given the fact that neither confidential witness explicitly

 stated that illegal ads were being placed on the QTT App at

 the   time    of   the    Offerings,      neither      witness     supports       a

 plausible inference that QTT placed illegal ads during the

 IPO and SPO.

       Next,    Plaintiff’s       allegations      that       public    reporting

 revealed that QTT was placing illegal advertisements on the

 QTT   App     represent     claims     of    “uncharged,         unadjudicated


                                      38


Case 1:20-cv-06707-VM    Document 144      Filed 02/05/26   Page 39 of 51


 wrongdoing    or    mismanagement”        that   Defendants       were     not

 obligated to disclose in the Offerings. Ciresi v. Citicorp,

 782 F. Supp. 819, 823 (S.D.N.Y. 1991), aff’d, 956 F.2d 1161

 (2d Cir. 1992). Further, any such reporting regarding illegal

 advertisements on the QTT app would be entirely consistent

 with QTT’s risk disclosure that it could not assure investors

 that all advertisements on the platform complied with PRC

 laws and regulations.

      Addressing Plaintiff’s allegations that a January 2019

 lawsuit against QTT’s Chinese entity Jifen showed that QTT

 placed gambling ads on the QTT app, the Chinese court in that

 matter   dismissed     the    case   without      making    any    findings

 regarding ads. (See SAC ¶ 90.) Accordingly, there was no

 finding regarding a violation of PRC advertising laws or

 regulations for QTT to disclose in the Offering Documents.

      Lastly, Plaintiff alleges that on June 18, 2019, QTT was

 summoned for a talk and sternly warned by the Shanghai

 Municipal Market Supervision Bureau, a Shanghai regulator,

 regarding QTT’s illegal advertising practices. (See id. ¶

 91.) First, this discussion took place two months after the

 April 2019 SPO. As Defendants point out, this discussion with

 a   regulator      cannot    “retroactively      render     the    offering

 documents materially false or misleading.” (Defs.’ Mem. at

 14); see Sogou, 465 F. Supp. 3d at 406 (“It is not sufficient


                                      39


Case 1:20-cv-06707-VM     Document 144        Filed 02/05/26    Page 40 of 51


 that, at some point after the registration statement became

 effective,      some     subsequent         event    made      it    no   longer

 accurate.”); see also In re Hut 8, 2025 WL 2636150, at *12

 (“[A]n actionable misstatement is one that ‘was false at the

 time it was made.’” (quoting In re Lululemon Sec. Litig., 14

 F.Supp.3d 553, 571 (S.D.N.Y. 2014))).

         Given QTT’s risk disclosures and the fact that the SAC

 fails    to   properly    plead      any    undisclosed       advertising      law

 violations by QTT, the Court does not find there to be any

 actionable     misrepresentations           or   omissions      by   Defendants

 regarding the placement of illegal advertisements on the QTT

 App at the time of the IPO and SPO.

               3.   QTT’s Failure to Disclose Knowledge of
               Illicit Advertising as a Key Driver of Revenue
               Growth

         It is well established that “companies do not have a

 duty to disclose uncharged, unadjudicated wrongdoing.” City

 of   Pontiac,    752     F.3d   at    184    (internal        quotation   marks

 omitted). However, “the duty to disclose uncharged wrongdoing

 may arise in three scenarios: (1) ‘when a corporation puts

 the reasons for its success at issue, but fails to disclose

 that a material source of its success is the use of improper

 or illegal business practices’; (2) ‘when a defendant makes

 a statement that can be understood, by a reasonable investor,

 to deny that the illegal conduct is occurring’; or (3) ‘when


                                        40


Case 1:20-cv-06707-VM       Document 144       Filed 02/05/26    Page 41 of 51


 a   defendant     states     an    opinion      that,    absent      disclosure,

 misleads    investors       about       material    facts      underlying       that

 belief.’” In re Teva Sec. Litig., 671 F. Supp. 3d 147, 211–

 12 (D. Conn. 2023) (quoting Menaldi v. Och-Ziff Capital Mgmt.

 Grp. LLC, 164 F. Supp. 3d 568, 581 (S.D.N.Y. 2016)). “When a

 securities fraud action rests on the failure to disclose

 uncharged       illegal    conduct,       the    complaint      must    state      a

 plausible       claim   that      the    underlying      conduct     occurred.”

 Menaldi, 164 F. Supp. 3d at 578. Because Plaintiff alleges

 that Defendants provided reasons for the Company’s growth in

 revenue but “fail[ed] to disclose that a material source of

 its success” was the placement of illegal advertisements on

 the QTT App, they must state a “plausible claim that the

 underlying conduct occurred.” Id.

         Plaintiff alleges that investors were misled about what

 drove QTT’s revenue growth because Defendants “failed to

 disclose that illicit advertising was also a key driver.”

 (Pl.’s Opp’n at 16.) Specifically, the SAC alleges that

 statements      in   the    Offering      Documents      that     increases      in

 revenue were caused by QTT’s strategy of targeting users in

 lower    tier    cities     were    materially       false     and     misleading

 because they did not “disclose that a substantial portion of

 QTT’s ‘rapidly’ increasing revenue was derived from illegal

 ads.” (Id.) Plaintiff also alleges that QTT’s statements


                                          41


Case 1:20-cv-06707-VM     Document 144       Filed 02/05/26   Page 42 of 51


 regarding revenue growth were misleading in that they omitted

 that “reduc[ing] [QTT’s] reliance” on Baidu in favor of a new

 “advertising agent” Dianguan “increased the likelihood of

 illegal ads” being placed on the QTT platform. (Id. at 16-

 17.) Plaintiff argues that under Rule 8 they have “adequately

 pled that illegal ads materially contributed to QTT’s revenue

 growth, as evidenced by its first ever year-over-year revenue

 decrease after enacting remedial measures to halt illegal

 ads[.]” (Id. at 18.) Plaintiff further alleges that the

 omission was material to investors “as evidenced by QTT’s

 ADSs’    falling    24     [percent]      after    investors    learned      the

 truth.” (Id.)

         Defendants argue that Plaintiff does not support his

 claim regarding illegal advertisements being a key driver of

 revenue    for     QTT   with   “well-plead        factual     allegations.”

 (Defs.’ Reply at 1.) Specifically, Defendants argue that the

 “SAC includes no allegation regarding the volume of allegedly

 illegal     advertisements”         and     that     the     “circumstantial

 allegations on which Plaintiff relies . . . are either

 unreliable, speculative, or conclusory.” (Id.)

         Plaintiff    has     not    adequately       pled      that   illegal

 advertisements       materially      contributed       to    QTT’s    revenue

 growth.    As    evidence    that   illegal       advertisements      were    so

 “substantial” that they constituted a material contribution


                                        42


Case 1:20-cv-06707-VM    Document 144   Filed 02/05/26   Page 43 of 51


 to QTT’s revenue growth, Plaintiff points to QTT’s first ever

 year-over-year revenue decrease after QTT enacted remedial

 measures to prevent illegal ads. (Pl.’s Opp’n at 18.)

      The   Court   is    not   persuaded   that    this    evidence     is

 sufficient to support a plausible inference that QTT failed

 to disclose that a material number of illegal advertisements

 existed on the QTT App at the time of the Offerings. First,

 the drop in revenue took place in 2020, after both the

 September 2018 IPO and the April 2019 SPO were filed. This

 does not demonstrate that prior to 2020, QTT knew that a

 substantial portion of advertisements were illegal. Plaintiff

 must demonstrate that Defendants knew the statements were

 misleading at the time of the registration statements became

 effective, rather than later in time. See In re Tufin Software

 Techs. Ltd. Sec. Litig., No. 20-CV-5646, 2022 WL 596861, at

 *5 (S.D.N.Y. Feb. 25, 2022) (“The veracity of a registration

 statement which may give rise to liability under [Section 11]

 is determined by assessing the facts as they existed when the

 statement became effective.”) (quoting Ladmen Partners, Inc.

 v. Globalstar, Inc., No. 07-CV-0976, 2008 WL 4449280, at *10

 (S.D.N.Y. Sept. 30, 2008)); Scott v. Gen. Motors Co., 46 F.

 Supp. 3d 387, 394 (S.D.N.Y. 2014), aff’d, 605 F. App’x 52 (2d

 Cir. 2015) (“Plaintiffs must, ‘at a minimum, plead facts to

 demonstrate that allegedly omitted facts both existed, and


                                   43


Case 1:20-cv-06707-VM    Document 144     Filed 02/05/26   Page 44 of 51


 were known or knowable, at the time of the offering.’”)

 (quoting Lin v. Interactive Brokers Grp., Inc., 574 F. Supp.

 2d 408, 421 (S.D.N.Y. 2008)); In re Coty Inc. Sec. Litig.,

 No. 14-CV-919, 2016 WL 1271065, at *6 (S.D.N.Y. Mar. 29, 2016)

 (decline in operating income after IPO “offer little guidance

 as to the information that was available at the time of the

 IPO”). Plaintiff therefore fails to allege that QTT knew that

 there were a substantial number of illegal advertisements on

 its platform at the time the Offerings.

         Additionally, a certain drop in QTT’s revenue does not

 equate to the equivalent drop in the number of illegal

 advertisements on the QTT App. While a substantial number of

 advertisements being illegal is a possible explanation for

 why   revenue   decreased    in   2020     after    QTT   took    remedial

 measures, without more this explanation is not brought into

 the realm of plausible, as there are a myriad of reasons why

 revenue can decrease from year-to-year. Plaintiff cannot

 allege any evidence regarding the high prevalence of illegal

 advertisements at the time the Offering Documents were filed,

 let alone that QTT knew that there was a substantial number

 of illegal advertisements on the QTT App at that time.

         Regarding Plaintiff’s allegation that Defendants misled

 investors by omitting that the acquisition of Dianguan as

 QTT’s    “advertising    agent”   “increased        the   likelihood      of


                                   44


Case 1:20-cv-06707-VM    Document 144     Filed 02/05/26    Page 45 of 51


 illegal ads,” Plaintiff has not pled non-conclusory facts

 that taken as true would support such a claim. (Pl.’s Opp’n

 at 16.) Plaintiff provides no support for any such allegation,

 which runs counter to QTT’s statements in Offering Documents

 that they acquired Dianguan as their advertising agent to

 “enhance [its] platform’s monetization capabilities.” (SAC ¶¶

 101, 112, 118, 124.) While Plaintiff alleges that Dianguan’s

 founder   lacked       experience   in     digital        marketing,       that

 circumstance has little bearing on whether the acquisition

 would increase the likelihood of illegal ads being placed on

 the QTT App compared to the previous advertising agent Baidu.

            4.   QTT Failed to Disclose Related Party
            Transactions

      Plaintiff alleges that Defendants failed to disclose

 related   party    transactions     as    required        under   Generally

 Accepted Accounting Principles (“GAAP”), SEC Regulation S-X

 (SAC ¶¶ 52-53), and Financial Accounting Standards Board

 (“FASB”) Accounting Standards Codification (“ACS”) 850 (SAC

 ¶ 54). Related parties under FASB ASC 850 include: (1)

 “Affiliates of the entity” (ASC 850-10-20); (2) “Principal

 owners of the entity and members of their immediate families”

 (id.); (3) “[m]anagement of the entity and members of their

 immediate families” (id.); (4) “[o]ther parties with which

 the entity may deal if one party controls or can significantly


                                     45


Case 1:20-cv-06707-VM        Document 144      Filed 02/05/26     Page 46 of 51


 influence the management or operating policies of the other

 to an extent that one of the transacting parties might be

 prevented from fully pursuing its own separate interests”

 (id.);    and    (5)       “[o]ther   parties      that    can    significantly

 influence       the    management      or     operating    policies        of    the

 transacting parties or that have an ownership interest in one

 of the transacting parties and can significantly influence

 the other to an extent that one or more of the transacting

 parties    might      be    prevented       from   fully   pursuing        its   own

 separate interests” (id.).

        Plaintiff alleges that QTT omitted material facts in the

 Offering Documents by not disclosing certain related party

 transactions. (See SAC ¶¶ 48-66.) First, Plaintiff alleges

 that QTT’s acquisition of Dianguan should have been disclosed

 as a related party transaction, because QTT’s co-founder and

 CEO Tan had a “close business relationship” with Dianguan’s

 founder,    Xiang      “Sean”       Liang    (“Liang”).        (Id.   ¶¶   57-61.)

 Second, Plaintiff alleges that QTT also failed to disclose

 that   transactions          with   advertisers      Mengtui,         Fangce,    and

 Shihui Miao were related party transactions because these

 entities were related parties benefitting Tan. (See id. ¶¶

 62-66.)


                                         46


Case 1:20-cv-06707-VM      Document 144    Filed 02/05/26    Page 47 of 51


         The analysis below first considers Plaintiff’s claim

 regarding Dianguan, and then turns to the claims regarding

 Mengtui, Fangce, and Shihui Miao.

                     a. Dianguan

         According to the SAC, Liang founded Dianguan four months

 prior to its acquisition by QTT in February 2018. (Id. ¶ 57-

 58.) Liang was Dianguan’s director and legal representative

 at the time of the acquisition. (Id. ¶ 58.) The SAC argues

 that     “Liang     and   Tan’s     business     relationship       was     so

 intertwined that Dianguan would have been prevented from

 fully    pursing    its    own    separate    interest[.]”      (Id.    ¶   61

 (internal quotations omitted).)

         The SAC provides two factual assertions to support its

 contention that Liang had a special relationship with Tan at

 the    time   QTT   acquired      Dianguan.    First,      before   founding

 Dianguan, Liang was an investment director of a company called

 Shanghai      Taiyun   Investment     Management     Co.     Ltd.   (“Taiyun

 Capital”), in which Tan had 99 percent ownership. (Id. ¶ 58.)

 Second, Plaintiff alleges that “within weeks of the Dianguan

 Acquisition, [] Tan invested in a company [called Nantong

 WooFoo Jinxin Equity Investment Fund Partnership (“Woofoo

 Equity”)] which was the executive partner of another company

 at which Liang was the director of domestic investment.” (Id.

 ¶ 60.) Plaintiff alleges that, because of these connections,


                                      47


Case 1:20-cv-06707-VM     Document 144        Filed 02/05/26   Page 48 of 51


 “Liang and Tan’s business relationship was so intertwined

 that Dianguan would have been prevented from fully pursing

 its own separate interest.” (Id. ¶ 61 (internal quotation

 marks omitted).)

       While Plaintiff describes a close business relationship

 between Liang and Tan, he fails to adequately plead that this

 relationship was so intertwined that Dianguan might have been

 prevented    from     fully   pursuing       its    own   interests.    First,

 because Tan’s involvement with Woofoo Equity came after QTT’s

 acquisition of Dianguan, it has no bearing on whether Liang

 and Tan were related parties at the time of the transaction

 between QTT and Dianguan, which is the “pertinent point.” In

 re Hebron Tech. Co., Ltd. Sec. Litig., No. 20-CV-4420, 2021

 WL 4341500, at *13 (S.D.N.Y. Sept. 22, 2021) (rejecting

 plaintiff’s claim that defendant failed to disclose a related

 party transaction where the SAC did not allege a relationship

 at the time of the relevant transactions). That Liang served

 as an investment director at Taiyun Capital, a company 99

 percent owned by Tan, also does not sufficiently allege that

 Tan   had   control    over   Liang     so     as   to    make   the   Dianguan

 acquisition a related party transaction. The existence of

 business relationship between Tang and Liang did not trigger

 a duty to disclose. “[T]he fact of a separate association

 between [] two men” does not mean that one individual had


                                       48


Case 1:20-cv-06707-VM      Document 144        Filed 02/05/26      Page 49 of 51


 control over another so as to make the transaction a “related

 party transaction.” In re Hebron, 2021 WL 4341500, at *15.

 Here, Liang’s role at a third company primarily owned by Tan,

 Taiyun Capital, does not meet the related party standard

 because    Plaintiff      does   not   plausibly          allege     how    Liang’s

 business relationship with Tan would have “prevented [Liang]

 from fully pursuing [his] own separate interest.” Id. at *11.

                     b. Mengtui, Fangce, and Shihui Mioa

         Plaintiff also fails to allege any undisclosed related

 party     transactions     at    the   time        of     the   Offerings         with

 advertisers    Mengtui,      Fangce,        and    Shihui       Mioa.   Plaintiff

 alleges that QTT’s transactions with its advertisers Mengtui,

 Fangce, and Shihui Miao should have been disclosed in the

 Offering Documents as related party transactions. (SAC ¶¶ 62-

 65.) While the Defendants’ do not dispute that these are

 related     party      transactions,           they       state      that     these

 transactions were properly disclosed in QTT’s 2019 annual

 report. (Defs.’ Mem. at 24-25.) Defendants argue that the

 “SAC     persists    in    pleading      no       facts    regarding        [QTT’s]

 transactions with these entities at the time of the September

 2018 IPO or April 2019 SPO, defeating this claim.” (Id. at

 25.) Because the SAC does not allege that the transactions

 began before the IPO and SPO and because they were disclosed

 as part of QTT’s annual review, the SAC fails to adequately


                                        49


Case 1:20-cv-06707-VM   Document 144   Filed 02/05/26   Page 50 of 51


 plead that QTT did not disclose related party transactions at

 the appropriate time. See Sogou, 465 F. Supp. 3d at 406 (“It

 is not sufficient that, at some point after the registration

 statement became effective, some subsequent event made it no

 longer accurate.”)

      C.    SECTION 15

      Section 15 of the Securities Act creates liability for

 individuals or entities that “control[ ] any person liable”

 under Sections 11 or 12. 15 U.S.C. § 77o(a). To state a claim

 for control person liability under Section 15, “a plaintiff

 must allege ‘a primary violation by a controlled person, and

 control by the defendant of the primary violator’” Ohio Pub.

 Emps. Ret. Sys. v. Discovery, Inc., 715 F. Supp. 3d 483, 505

 (S.D.N.Y. 2024), aff’d, No. 24-646-CV, 2024 WL 4647131 (2d

 Cir. Nov. 1, 2024) (quoting In re Global Crossing, Ltd. Secs.

 Litig., 322 F. Supp. 2d 319, 349 (S.D.N.Y. 2004)) (cleaned

 up). “If the plaintiff has not adequately alleged a primary

 violation – i.e. a viable claim under another provision of

 the Securities Act – the Section 15 claim must be dismissed.”

 In re Hut 8, No. 24-CV-904, 2025 WL 2636150, at *6. Here, the

 Court has found that there are no viable claims under Section

 11 or Section 12. Therefore, Plaintiff does not have a viable

 Section 15 claim.


                                  50


Case 1:20-cv-06707-VM   Document 144     Filed 02/05/26   Page 51 of 51


                              IV.    ORDER

      For the preceding reasons, it is hereby

      ORDERED that the motion (the “Motion”) (Dkt. No. 122) of

 Defendants Oliver Yucheng Chen, China Merchants Securities

 (HK) Co., Ltd., Citigroup Global Markets Inc., Yongbo Dai,

 Deutsche Bank Securities Inc., Jianfei Dong, Jefferies Group

 LLC, Shaoqing Jiang, KeyBanc Capital Markets Inc., Feng Li,

 Lei Li, James Jun Peng, Qutoutiao Inc., Eric Siliang Tan, UBS

 Securities LLC, Jingbo Wang, and Xiaolu Zhu to dismiss the

 Second Amended Consolidated Class Action Complaint (Dkt. No.

 118) is GRANTED.

      The Clerk of Court is respectfully directed to close

 Dkt. No. 118.


 SO ORDERED.

 Dated:     5 February 2026
            New York, New York


                                    51