Abstract:
On September 12, according to Bloomberg, Dada Group, a retail and delivery platform owned by JD.com, agreed to pay US$500,000 to settle charges brought against it by the U.S. Securities and Exchange Commission (SEC). The SEC said that in order to meet revenue targets, Dada conducted a series of "false transactions" in multiple quarters starting in October 2022.
JD.com
The SEC said in a cease and desist order issued on Friday that Dada allegedly forged certain online advertising and marketing transactions between October 2022 and September 2023, inflating net revenue and operating and support costs by more than $160 million.
Dada agreed to pay the fine but did not admit to the SEC's charges. Representatives for the company have not responded to requests for comment.
Dada disclosed in January 2024 that it was investigating certain "suspicious behaviors" that may cast doubt on the company's revenue from online advertising and marketing services in the first three quarters of 2023. The company estimated at the time that millions of dollars in revenue could have been inflated. Dada's share price plummeted 46% due to the news.
The transactions involved nearly identical payments and disbursements of funds and lacked substance or were not supported by business records, the SEC said on Friday. The SEC said these transactions helped Dada inflate its net revenue by 8% and 9% respectively in the second quarter and third quarter of fiscal year 2023.
JD.com privatized Dada in June 2025, and the latter became a wholly-owned subsidiary of JD.com.
The SEC said that in evaluating how to reach a settlement, the agency considered Dada's cooperation with investigators and the steps it took to resolve internal issues.
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