According to the Complaint, Waterdrop Inc. operates an insurance technology platform in China purportedly focused on providing “a positive social impact.” The Company has historically operated three business segments: (i) an insurance marketplace that matches consumers with health and life insurance products; (ii) medical crowdfunding, which enables people to provide donations to people with significant medical costs; and (iii) mutual aid, which enabled people suffering from over 100 types of critical illness to spread their medical cost burdens. The Company discontinued its mutual aid segment in March 2021, shortly before the IPO.

On April 16, 2021, the Company filed with the SEC a registration statement on Form F-1 for the IPO, which, after an amendment, was declared effective on May 6, 2021 (the “Registration Statement”). On May 7, 2021, the Company filed with the SEC a prospectus for the IPO on Form 424B4, which incorporated and formed part of the Registration Statement. The Registration Statement was used to sell to the investing public 30 million Waterdrop ADSs at $12 per ADS.

The Complaint alleges that the IPO’s Registration Statement failed to disclose that Waterdrop was the subject of an intense regulatory investigation and pending crackdown by Chinese authorities because of a variety of market abuses perpetrated by Waterdrop used to artificially inflate Waterdrop’s short-term financial results in the lead up to the IPO, including, among other things: (i) operating insurance platforms without proper governmental authorizations; (ii) mispricing risks for consumers; and (iii) illicitly using client information. The Complaint further alleges that, unbeknownst to investors, the reason that Waterdrop had discontinued its mutual aid segment was because it had been ordered to do so by Chinese regulators.

On December 8, 2021, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on February 21, 2022. Defendants filed a Motion to Dismiss the amended Complaint on April 22. On February 3, 2023, the Court issued an Order granting Defendants' Motion to Dismiss. The case was dismissed with prejudice.

Lead Plaintiff filed a notice appealing the Court's Dismissal Order on March 6, 2023. The Court of Appeals affirmed the Judgment of the District Court on February 6, 2024.