Pomerantz Named Lead Counsel in Investor Suit Against Fintech Company DLocal

On January 4, United States Magistrate Judge James R. Cho of the United States District Court for the Eastern District of New York named Pomerantz Lead Counsel in a securities class action against Uruguayan fintech company DLocal. The case alleges that DLocal made misleading statements about its compliance with Argentine financial regulations.

DLocal is a financial technology company headquartered in Montevideo, Uruguay, which provides international payment processing services for merchants. DLocal’s clients include commerce, streaming, ride-hailing, financial services, advertising, travel, gaming, and crypto companies among others. According to the complaint, the company’s SEC filings covering the years 2021 and 2022 contained generic statements about DLocal’s exposure to regulations governing foreign exchanges in Argentina, while failing to disclose known risks relating to the company’s lack of compliance with Argentine foreign exchange laws. In May 2023, an Argentinean news outlet reported that the Argentine government was investigating DLocal for possible fraud, following which DLocal’s share price dropped more than 17%. The suit contends that DLocal’s SEC filings omitted material information about the company’s dealings in Argentina which violated the country’s foreign exchange regulations, exposing DLocal to an increased risk of regulatory scrutiny and enforcement.   

DLocal’s CEO Sebastian Kanovich and CFO Deigo Cabrera Canay are also named as defendants in the suit.