Lufax Faces Securities Class Action After Firing Auditor

Lawsuit alleges company misled investors about related-party transactions and internal controls

Apr. 2, 2026 at 11:19pm by Ben Kaplan

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A high-contrast, cinematic black-and-white close-up of complex financial machinery and banking equipment, conveying the heavy, tangible nature of financial institutions and the importance of secure, well-regulated banking infrastructure.The alleged lack of transparency around Lufax's financial dealings has raised concerns about the company's internal controls and accounting practices.San Francisco Today

A securities class action lawsuit has been filed against Lufax Holding Ltd. (NYSE: LU), seeking to represent investors who purchased or otherwise acquired Lufax securities between April 7, 2023 and January 26, 2025. The lawsuit follows Lufax's January 27, 2025 announcement that it removed its auditor after the auditor expressed concerns about potential, undisclosed, related-party transactions.

Why it matters

The developments have prompted national shareholders rights firm Hagens Berman to investigate claims that Lufax violated the federal securities laws. The lawsuit alleges Lufax lacked adequate internal controls and that certain Lufax financial results were materially misstated, contradicting the company's previous assurances to investors.

The details

Lufax, which describes itself as a 'leading financial services enabler for small business owners in China,' revealed that its auditor (PricewaterhouseCoopers or 'PwC') was orally notified of its removal on January 16, 2025, less than six months after the company's Audit Committee reappointed the firm. Lufax framed PwC's disagreement with the company as based on PwC's concerns about undisclosed related party transactions that PwC said warranted an expert and independent investigation. PwC also refused to 'consent to the incorporation of its prior audit or review opinions in any current or future Company filings' and said that, since it could not rely on the Company's representations in connection with its 2022 and 2023 financial statements, PwC's audit opinions for those years should no longer be relied upon.

  • On January 27, 2025, Lufax revealed that it had removed its auditor.
  • On April 23, 2025, Lufax revealed that it had engaged in a series of transactions as the sole investor in certain trusts from May 2023 to June 2024, involving the trusts' purchases of assets from Lufax-affiliated entities.

The players

Lufax Holding Ltd.

A financial services company that describes itself as a 'leading financial services enabler for small business owners in China'.

PricewaterhouseCoopers (PwC)

Lufax's former auditor, which was removed by the company in January 2025 after raising concerns about potential undisclosed related-party transactions.

Hagens Berman

A national shareholders rights firm investigating claims that Lufax violated federal securities laws.

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What they’re saying

“We're investigating whether Lufax intentionally violated applicable accounting rules and disclosure requirements when it comes to full transparency about related-party transactions.”

— Reed Kathrein, Hagens Berman partner

What’s next

The judge in the case will decide on May 20, 2026 whether to certify the class action lawsuit against Lufax.

The takeaway

This case highlights the importance of financial transparency and the need for companies to maintain robust internal controls to prevent potential accounting irregularities and related-party transactions from going undisclosed to investors.