SAN FRANCISCO, April 14, 2020 /PRNewswire/ -- Hagens Berman urges investors in GSX Techedu Inc. (NYSE: GSX) who have suffered significant losses to submit their losses now. The firm is investigating possible securities law violations.
GSX Techedu (GSX) Investigation:
The investigation focuses on the accuracy of GSX's reported financial results, effectiveness of its internal controls and procedures over financial reporting, and the company's compliance with accounting rules for revenue recognition.
GSX and its senior management have repeatedly hyped the company's reported record revenue and gross billings growth, most recently on Feb. 18, 2020, in connection with GSX's Q4 and FY 2019 financial results.
But, on Apr. 14, 2020, Citron Research published a scathing report, "GSX Techedu Inc. – The Most Blatant Chinese Stock Fraud Since 2011," accusing GSX of fabricating up to 70% of its revenues. According to the report, GSX's Chinese official government financials and SEC financials are irreconcilable and show a 75% overstatement of net profits for FY 2017 – 2018 alone.
On this news, the price of GSX ADSs dropped sharply during intraday trading on Apr. 14, 2020.
"We're focused on investors' losses and determining the true scope of this potential financial fraud at GSX," said Reed Kathrein, the Hagens Berman partner leading the investigation.
Whistleblowers: Persons with non-public information regarding GSX should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
About Hagens Berman
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Reed Kathrein, 844-916-0895
SOURCE Hagens Berman Sobol Shapiro LLP