On March 31, 2025, Judge Arun Subramanian of the U.S. District Court for the Southern District of New York ruled that key claims in a securities class action lawsuit against The Estée Lauder Companies Inc. could move forward. The lawsuit alleges that between February 2022 and October 2023, Estée Lauder misled investors about the sustainability of its sales in China through the use of prohibited gray-market resellers known as daigou. The court found sufficient allegations that the company, along with its former CEO and CFO, made false and misleading statements with intent to defraud investors. The revelation of these practices led to a significant drop in the company's stock price following China's crackdown on daigou resellers. Investors are encouraged to explore their legal options as investigations into potential false claims and insider stock sales totaling $306 million continue.
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