Coupang Wins Dismissal With Prejudice of Securities Class Action Over IPO

Paul, Weiss won a significant victory for Coupang, Inc., an e-commerce giant known as “Korea’s Amazon,” and certain directors and officers when the Southern District of New York dismissed a putative securities class action concerning Coupang’s 2021 IPO—the largest U.S. IPO by an Asian company since 2014, valuing the company at over $60 billion at the time. The court dismissed the complaint in its entirety with prejudice and without leave to amend—a complete defense victory and a very rare result on a first motion to dismiss, especially in a securities class action of this size and complexity.

Initially filed in August 2022, the 150-page complaint alleged a large number of misrepresentations and omissions in materials issued in connection with Coupang’s IPO, and in various statements made between March 11, 2021, and March 14, 2022, at which point Coupang’s shares traded 75% lower than their opening price on the day of the IPO.

In our motion to dismiss, we demonstrated that the plaintiffs failed to plausibly allege the elements necessary to plead Exchange Act or Securities Act violations. Given the sprawling nature of the complaint, we also took a categorical approach, grouping the challenged statements into five thematic categories in order to better organize the allegations and give the court a clear roadmap to work with.

The judge adopted our analytic approach and echoed our arguments in their entirety. U.S. District Judge Vernon Broderick’s 83-page opinion followed the roadmap laid out in our brief and concluded that none of the challenged statements were actionably misleading, and that the plaintiffs failed to establish that the defendants acted with fraudulent intent in making these statements. The court also held that the Securities Act claims are time barred.

The Paul, Weiss team included litigation partners Andrew Ehrlich, Brette Tannenbaum and Matthew Stachel and counsel Daniel Sinnreich.