LK - Report: Luckin Coffee Under SEC Investigation Over Accounting Scandal; Annual Report Delayed
It is apparently not enough for Luckin Coffee (NASDAQ: LK) to conduct an internal investigation over Chief Operating Officer Jian Liu's inflating of the company's sales figures. A report published Wednesday in The Wall Street Journal, citing "people familiar with the matter," indicates that the Securities and Exchange Commission (SEC) has also launched an investigation to the alleged malfeasance.
Complicating the matter is the fact that Luckin, although it is listed on the Nasdaq, is headquartered and conducts much of its business in China. An effective investigation, then, would likely have to involve the company in some way, in addition to relying on cooperation from Chinese regulators and financial investigatory bodies.
Last weekend one such regulator, the State Administration for Market Regulation, raided Luckin's headquarters in the city of Xiamen.