The company, which lost about $15 billion of market value on Tuesday alone, had the second-largest U.S. IPO for a Chinese firm on record, raising $4.4 billion.

Securities class action law firms filed complaints in federal court in New York and Los Angeles late on Tuesday, saying the company failed to disclose ongoing talks it was having with Chinese authorities about its compliance with cybersecurity laws and regulations. The Chinese cybersecurity regulator announced on July 2 that it had begun an investigation of Didi and two days later ordered that the company’s app be removed from smartphone app stores.

The suits named Chief Executive Officer Will Wei Cheng, President Jean Qing Liu and several other executives and directors. Lead underwriters Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co. were also named as defendants.

Didi didn’t immediately respond to a request for comment. Goldman, Morgan and JPMorgan declined to comment on the suit.

China Risk Factors

Didi listed several risks factors associated with doing business with a Chinese firm subject to Chinese regulation in its IPO prospectus, but the suits said the company failed to highlight the ongoing talks it was having with regulators in Beijing.

“Rather than disclose the known discussions into the company’s practices and non-compliance with relevant technology laws, the registration statement vaguely discussed China’s regulatory regime with regards to data security,” shareholder Rafael Espinal said in the New York suit.

Chinese regulators asked Didi as early as three months ago to delay its landmark U.S. IPO because of cybersecurity concerns, according to people familiar with the matter. Shortly after launching its review of Didi, the Chinese government issued a sweeping warning to the country’s biggest tech companies, vowing to tighten oversight of both data security and overseas listings.

The corporate structure employed by Didi and other large Chinese companies that list in the U.S. could present a challenge to plaintiffs. U.S. shareholders can only own stakes in Chinese tech companies indirectly through offshore companies known as variable interest entities, which the Chinese government has suggested it will begin regulating more closely.

Didi warned IPO investors in its prospectus that their ability to protect their “rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.”

The cases are Espinal v Didi Global Inc., 21-cv-5807, U.S. District Court, Southern District of New York and Franklin v Didi Global Inc., 21-cv-5486, U.S. District Court, Central District of California.