Park Ha Biological Technology faces a securities class action over a 93 percent stock collapse tied to an alleged pump-and-dump scheme. Investors who bought BYAH shares between December 27, 2024 and July 8, 2025 have until September 28, 2026 to seek lead plaintiff appointment.
Park Ha faces a securities class action over a 93 percent stock collapse tied to an alleged pump-and-dump scheme following its $4.8 million IPO.
"Individual officers who sign SEC certifications bear personal responsibility for the accuracy of corporate disclosures," Joseph E. Levi, founding partner at Levi & Korsinsky, said.
BYAH shares fell $38.02 on July 8, 2025, closing at $2.99 after reaching an intraday high of $41.49 the prior day. The decline erased more than $1 billion in market capitalization on volume exceeding 8.9 million shares. The complaint, filed in the Southern District of New York, alleges the December 2024 registration statement omitted the promotional scheme and an IPO structured with a public float of less than 5 percent.
Investors who purchased BYAH securities between December 27, 2024 and July 8, 2025 have until September 28, 2026 to seek appointment as lead plaintiff. The lawsuit names CFO Xiaoyan Zhu, who signed the registration statement, along with founder and CEO Xiaoqiu Zhang and director Li Wang.
The complaint alleges impersonators posing as financial advisors touted the stock in WhatsApp groups with fabricated claims of a L'Oréal partnership and projected gains of 200 percent to 300 percent. The registration statement reported franchise fee revenue of $551,970 for the six months ended April 30, 2024 and a 93 percent gross profit margin on non-franchisee product sales, without disclosing that the sub-5 percent public float left shares susceptible to coordinated manipulation. Park Ha operates a skincare franchise business, and the complaint contends the offering documents presented a growing franchise model while concealing the promotional scheme that drove the stock's artificial surge.
The action asserts claims under Sections 11, 12, and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act. Officers and directors who signed the offering documents may be held individually responsible if the alleged omissions are proven.
Pomerantz LLP, which also announced the class action, said the stock's rise from its $4.00 IPO price to $41.49 occurred without any material corporate developments or legitimate business prospects to justify the surge. The firm noted that investigations and public reports revealed the stock was used in a market manipulation scheme with impersonators claiming to be legitimate financial advisors.
The litigation compounds regulatory and legal risks for Park Ha, which could face further selling pressure, delisting concerns, or additional scrutiny from the SEC. The September 28 lead plaintiff deadline will determine which investors direct the case, and any settlement or judgment could impose significant financial penalties on the company and its executives.
This article is for informational purposes only and does not constitute investment advice.
