Securities Class Action Filed; Firm Investigating Allegations of Undisclosed Chinese Military Ties and Fraudulent AI Distillation Attacks
SAN FRANCISCO, Aug. 11, 2026 /PRNewswire/ -- Hagens Berman Sobol Shapiro LLP urges Alibaba Group Holdings Limited (NYSE: BABA) investors who suffered substantial losses submit their losses now.
A securities fraud class action lawsuit has been filed against Alibaba, and investors are encouraged to contact the firm regarding potential recoveries and lead plaintiff rights. The case, captioned Wistisen v. Alibaba Group Holding Limited, et al., No. 1:26-cv-06654 (S.D.N.Y.), accuses Alibaba and certain of its executive officers of violating the Securities Exchange Act of 1934.
Class Period: June 26, 2025 – June 24, 2026
Lead Plaintiff Deadline: Oct. 5, 2026
Visit: www.hbsslaw.com/cases/alibaba
Contact the Firm Now: BABA@hbsslaw.com
844-916-0895
Core Allegations
The lawsuit alleges that Alibaba and certain executives misrepresented and failed to disclose adverse facts pertaining to the Company's business which were known to Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that:
- Under the National Defense Authorization Act (NDAA), any entities directly or indirectly controlled by or affiliated with the Chinese Ministry of Industry and Information Technology (MIIT) were considered a Chinese military company;
- Alibaba was directly or indirectly controlled by or affiliated with the MIIT;
- The risk of Alibaba carrying out distillation attacks against third- party AI models was not a mere hypothetical or inadvertent, but ongoing; and
- As a result, Defendants' public statements about Alibaba's business, operations, and prospects were materially false and/or misleading at all relevant times.
The Truth Emerges
The truth regarding Alibaba's regulatory exposure and illicit business practices was revealed through a series of partial corrective disclosures:
- June 8, 2026: The U.S. Department of Defense added Alibaba to its list of Chinese military companies under the NDAA due to its ties to the MIIT. On this news, Alibaba ADSs fell $4.69 per share, or 3.9%, over two trading sessions.
- June 24, 2026: Bloomberg reported that Anthropic alerted U.S. officials that Alibaba fraudulently accessed Anthropic's Claude AI models via thousands of fake accounts to execute unauthorized "distillation" attacks to train its own models. On this news, Alibaba ADSs fell $4.73 per share, or 4.7%, to close at $95.07 on June 25, 2026.
The complaint alleges that as a result of Defendants' misleading statements and omissions, investors suffered substantial losses when the artificial inflation was removed from the stock.
Hagens Berman's Investigation
"We are investigating whether Alibaba executives intentionally concealed the company's regulatory ties and engaged in fraudulent operational practices to mislead the market about its true risk profile and competitive position," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation of the alleged claims in the pending suit.
What Affected BABA Investors Should Do
If you purchased or acquired Alibaba securities between June 26, 2025, and June 24, 2026, and suffered significant financial losses, you have until October 5, 2026, to ask the court to appoint you as lead plaintiff. You do not need to seek lead plaintiff status to share in any potential recovery.
To learn more about your legal options, submit your information to Hagens Berman, visit www.hbsslaw.com/cases/alibaba, call Reed Kathrein at 844-916-0895, or email BABA@hbsslaw.com.
Whistleblowers: Persons with non-public information regarding Alibaba should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email BABA@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Attorney Advertising. Prior results do not guarantee a similar outcome in any future case.
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SOURCE Hagens Berman Sobol Shapiro LLP
