Alibaba Securities Class Action Reinstated

The Second Circuit recently revived a putative securities class action against Alibaba Group Holding Ltd. and four of its top executives for alleged material misrepresentations in connection with the company's $25 billion initial public offering in September 2014 – the largest in U.S. history. Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York had dismissed the suit in June 2016, holding that the plaintiffs failed to state a claim under the Securities Exchange Act of 1934. In a summary order last week, the Second Circuit vacated and remanded, concluding that Judge McMahon misapplied Rule 12(b)(6) standards in dismissing the investors' claims.