NEW YORK, Oct. 11, 2023 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against DLocal Limited (“DLocal” or the “Company”) (NASDAQ: DLO) and certain officers. The class action, filed in the United States District Court for the Eastern District of New York, and docketed under 23-cv-07501, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired DLocal securities between May 2, 2022 and May 25, 2023, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired DLocal securities during the Class Period, you have until December 5, 2023 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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DLocal operates a payment processing platform for merchants worldwide and, as part of its operations, engages in certain foreign exchange transactions. As a result, the Company is subject to the various foreign exchange regulations and controls of the countries within which it operates, including, inter alia, Argentina, which has historically been one of the Company’s most important markets.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) DLocal engaged in certain improper conduct and transfers abroad in violation of Argentine laws and/or regulations, including, inter alia, foreign exchange regulations; (ii) accordingly, DLocal’s compliance controls and procedures, including its disclosure controls and procedures and internal controls over financial reporting, were deficient; (iii) all the foregoing subjected the Company to a heightened risk of governmental and/or regulatory scrutiny in Argentina and/or enforcement action by Argentine authorities; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On May 26, 2023, Argentine news outlet Infobae published an article reporting that the Argentine government was investigating DLocal for a possible $400 million fraud. Specifically, Infobae reported that the government was investigating the Company for “improper maneuvers” and transfers abroad, with unnamed sources alleging that DLocal “operates as a mere instrument to take advantage of the exchange rate gap and to take dollars abroad with operations that are not reflected in the accounting.”
The same day, DLocal issued a response to the Infobae article, characterizing it as “misleading” and “factually incorrect”. DLocal’s response also assured investors that the Company is in “close contact with [Argentine] authorities”, that “there is a continuous flow of information” with those authorities, and that, “[a]s of today, we have not been notified by any Argentinian [sic] authority regarding a foreign exchange investigation.”
Following these developments, DLocal’s Class A common share price fell $2.39 per share, or 17.32%, to close at $11.41 per share on May 26, 2023.
On June 5, 2023, DLocal disclosed in a filing with the U.S. Securities and Exchange Commission that it “received a request for information from Argentine customs authorities, although the Company notes that expatriation rules and foreign exchange operations are regulated by the Argentine Central Bank”; that “[o]n June 1, 2023 . . . the Company confirmed with a local Argentine court that a petition for inquiry had been filed by an Argentine prosecutor on May 30, 2023 in response to the same article published by [Infobae] seeking information using as a basis for the request the above-mentioned article”; and that “[t]he Company intends to respond to any and all requests for information from regulatory authorities to demonstrate that it has acted in accordance with applicable regulations.”
Then, on June 15, 2023, DLocal issued a press release revealing that it was in fact “engag[ing] with senior representatives of the Argentine federal government to discuss, among other matters, the manner in which dLocal operates in the country, including dLocal’s compliance with foreign exchange regulations”.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980
