Luckin Coffee reaches settlement with US regulator, pays $ 180m fine

Luckin Coffee, a potential rival to Starbucks, stated on Thursday that it has reached a settlement with US securities regulators on alleged financial fraud by some of its former employees.

The company and its stores continue to operate unaffected, and Luckin Coffee will continue to cooperate with the authorities and improve its internal monitoring, the company said in a statement.

US securities regulators fined Luckin Coffee $ 180 million for defrauding investors over its financial performance, US securities officials announced on Wednesday.

The embattled chain intentionally fabricated more than $ 300 million in sales to

“falsely appear to achieve rapid growth,” according to a statement by the US Securities and Exchange Commission ( SEC) in recent months.

On April 2, Luckin Coffee announced that its chief operating officer Liu Jian and several other employees had been involved in financial fraud relating to 2.2 billion yuan ($ 336.9 million) in transactions, and the company had set up a special committee to conduct an internal investigation into the matter.

Several law firms in the US initiated class action lawsuits against the company for making false and misleading statements and violating US securities laws.

On June 29, Luckin Coffee halted trading on the Nasdaq exchange and ended its 400day life as a listed company. Luckin’s stock price was fixed at $ 1.38 per share, compared with the IPO price of $ 17, a drop of 90 percent.