Xia Bi v. McAuliffe

The Fourth Circuit affirmed the district court's dismissal of plaintiffs' claims stemming from failed investments in an electric vehicle startup, GreenTech. Plaintiffs are a group of 27 Chinese investors who invested $500,000 each in a partnership that loaned their money to GreenTech. Plaintiffs claimed that false statements were made relating to the partnership's fundraising efforts, as well as relating to GreenTech's sell of vehicles and business plans. Plaintiffs now seek to recover losses from their failed investments.The court held that the amended complaint failed to adequately allege justifiable reliance, instead relying on general and conclusory allegations. Even if plaintiffs had properly described who relied on each misstatement and how that person heard of it, they failed to plead justifiable reliance because the written offering documents controlled and contradicted the sorts of stray media statements attributed to GreenTech and the partnership. The court held that there was no plausible allegation in the complaint that defendants diverted plaintiffs from conducting a prudent and objectively reasonable investigation before investing. View "Xia Bi v. McAuliffe" on Justia Law