b'of the PRCs Interim Measures and the 36% APR capWith respect to the Interim Measures prohibition on by financial services providers operating on Jianpusinterest rates exceeding 36%, the court concluded that platform. The court held that plaintiff sufficientlyplaintiff adequately pled the pre-IPO existence of material alleged that there was material information availablerisks associated with such prohibitions, noting that to defendants, which they did not disclose in Jianpusdefendants dispute with the precise date in which the Offering Documents, but were obligated to disclosecap was instituted precluded dismissal of the claims based under Items 303 and 503 of Regulation S-K, abouton material factual disputes which could not be resolved (1) financial services providers non-compliance withat the motion to dismiss stage. The court also found the Interim Measures; (2) the fact that many of thesedefendants risk disclosures insufficient and too vague financial services providers used Jianpus platform;because they were framed as hypotheticals and failed to and (3) the possible effects of their non-compliance onexplain the nature and magnitude of the risk that violations Jianpus business.of the 36% APR cap posed to Jianpus business. The court rejected defendants argument that JianpuThe court also concluded that the doctrine of negative had no duty to disclose a pre-IPO market-wide declineloss causation did not bar plaintiffs claims because, in P2P lenders because plaintiff failed to allege anas an affirmative defense, defendants failed to meet impact on Jianpu, noting that a pre-IPO report by atheir burden of proof. The court held that plaintiff China-based financial web portal stated 75% to 90% ofplausibly alleged defendants concealment of the the participants in the P2P market were in violation ofthen-existing business risks associated with pre-the Interim Measures, which ma[de] plausible PlaintiffsIPO Interim Measures violations and 36% APR cap, allegation thatmany of the 746 financial servicesand the adverse effect to Jianpus revenue from loan providers operating on Jianpus platform were alsorecommendation services. The court explained that violating the Interim Measures. Coupled with JianpusJianpus business did not decline until after the IPO own acknowledgement just a few weeks after the IPO[was] not inconsistent with Plaintiffs allegation that the that around 12% of Jianpus total revenue resulted fromrisk posed by pre-IPO violations materialized in the non-licensed financial institutionswhich exceededface of greater enforcement. the 5% threshold for presumptive materiality under priorOn November 12, 2020, defendants answered the securities law precedencethe court concluded thatamended complaint. Fact discovery is set to close on plaintiff adequately pled facts to further support theSeptember 30, 2021, and expert discovery is set to inference that a significant portion of financial serviceclose February 1, 2022. A trial date has not been set.providers operating on Jianpus platform were violating the Interim Measures. The court also concluded that plaintiff sufficientlyIn re Micro Focus International PLC alleged that defendants failed to adequately discloseSecurities Litigation, Case No. 1:18-CV-the existence and extent of the P2P financial service06763-ALC, 2020 WL 5817275 (S.D.N.Y. providers operating on Jianpus platform that wereSept. 29, 2020) violating the Interim Measures and the effect that thosePost-Merger Integration Issuesviolations would have on Jianpus financial returns. The court noted that although the Registration StatementMicro Focus International (Micro Focus) is a publicly specifically mentioned licensing requirements andtraded UK-based infrastructure software company warned that the PRC government regulates the conductthat develops, sells, and supports software products of licensing and permit requirements for companies inand solutions to businesses and various governmental the internet industry, these disclosures [did] nothingentities. Micro Focus software helps customers to inform investors that financial services providersbuild, operate and secure IT systems that bring operating on Jianpus platform do not currently holdtogether existing business logic and applications with such licenses as the risk disclosures were generalemerging technologies to meet increasingly complex statements that were all framed as hypotheticals.business demands.In evaluating the Prospectus as a whole, the courtOn September 7, 2016, Micro Focus announced that held that defendants did not adequately disclose theit would purchase HPE Software, an enterprise and risks associated with the Interim Measures, as thesoftware operating unit of Hewlett Packard Enterprises, disclosures portrayed a bullish P2P lending marketwhich would be spun out and merged into Micro Focus. without disclosing that the PRC already adopted theOn August 4, 2017, Micro Focus filed its Registration regulatory framework and without disclosing theStatement and issued approximately 222 million complete context of the financial services market, whichAmerican Depositary Shares of the combined company, would have included the existing rapid contraction ofwhich would continue to operate under the name the P2P market. 77'