dLocal Wins Dismissal of Securities Class Action Lawsuit Full Breakdown for DLO Investors

A New York court has thrown out a securities fraud class action against fintech company dLocal — delivering a significant legal win for the NASDAQ-listed payments company. A New York state court judge dismissed claims against dLocal and its underwriters in a proposed class action alleging the company misstated a key financial metric and misrepresented the state of its financial controls in advance of its June 2021 initial public stock offering that saw the company valued at nearly $9.5 billion. The ruling, issued March 25, 2025, ends the New York state court track of a multi-front legal battle that had been hanging over dLocal since its high-profile IPO.

Quick Case Snapshot

Field	Details
Defendant	dLocal Limited (NASDAQ: DLO) + Executive Officers + IPO Underwriters
Plaintiffs	Proposed class of investors who purchased DLO securities at IPO
Court	New York State Supreme Court (NY County)
Case Citation	Matter of dLocal Sec. Litig., 2025 NY Slip Op 30893(U)
Related Federal Case	Francis v. DLocal Limited, No. 23-cv-07501 (E.D.N.Y.)
Claims Alleged	Violations of Securities Act of 1933 (Sections 11 & 15); materially false IPO disclosures
IPO Date	June 4/22, 2021
IPO Share Price	$21.00 per share
IPO Valuation	~$9.5 billion
Ruling	Dismissed — March 25, 2025
Damages Sought	Hundreds of millions of dollars (not formally specified)
Current Status	Dismissed (state court); federal track status — TBD)

What Is dLocal and Why Did Investors Sue?

dLocal is a Uruguayan financial technology company that facilitates cross-border payment processing in emerging markets across Latin America, Africa, and Asia. It went public on NASDAQ in June 2021 in one of the most closely watched fintech IPOs of that year, pricing at $21 per share and reaching a valuation of nearly $9.5 billion.

The legal trouble started almost immediately after the IPO’s honeymoon period ended.

On November 16, 2022, short-seller research firm Muddy Waters Research published a report entitled “DLO: ‘History Never Repeats Itself, but it Does Often Rhyme,'” concluding that “DLO is likely a fraud” and stating that the company had made disclosures about its TPV (Total Processing Volume) and accounts receivable that flatly contradicted one another.

On this news, dLocal’s stock price fell $2.21 per share, or 15.1%, to close at $12.39 per share on December 1, 2022. The stock would ultimately fall far further.

When the truth regarding the company’s TPV and internal controls reached the market, dLocal’s common stock cratered over 50%. All told, investors lost hundreds of millions of dollars.

What the Lawsuits Alleged: The Core Claims

Investor litigation followed from two directions — a New York state court action and a federal case in the Eastern District of New York.

The IPO-focused claim (state court — now dismissed):

According to the complaint, on June 4, 2021, dLocal filed a prospectus with the SEC in connection with the IPO, issuing 29,411,765 Class A common shares to the public at an offering price of $21.00 per share. Plaintiffs alleged the offering documents were negligently prepared and failed to disclose that dLocal was misrepresenting its Total Processing Volume and had misrepresented its foreign currency receivables.

What is TPV? Total Processing Volume is a fintech company’s headline metric — it represents the total dollar value of payments processed through the platform. For a payments company, TPV is to investors what revenues are to a traditional business. Allegedly understating or misstating it would be highly material to any investor decision.

The Argentina-linked federal claim:

The federal complaint alleged that dLocal made false and misleading statements and failed to disclose that it engaged in certain improper conduct and transfers abroad in violation of Argentine laws, including foreign exchange regulations; that its compliance controls and procedures were deficient; and that these issues subjected the company to a heightened risk of government scrutiny in Argentina.

Investors began to learn of alleged problems on May 26, 2023, when Argentine news outlet Infobae reported that the Argentine government was investigating dLocal for a possible $400 million fraud involving “improper maneuvers” and transfers abroad.

The Dismissal: What the Court Decided

A New York state court judge dismissed claims against dLocal and its underwriters, ruling in the company’s favor on the IPO-related securities claims. The court found the plaintiffs had not sufficiently stated claims under Sections 11 and 15 of the Securities Act of 1933 — the federal statutes governing misstatements in IPO registration statements.

The full reasoning of the court’s ruling is detailed in Matter of dLocal Sec. Litig., 2025 NY Slip Op 30893(U).

What does a Section 11 claim require? 

Under the Securities Act of 1933, investors can sue if an IPO registration statement contains a materially false statement or omission. Unlike fraud claims (which require proving intentional deception), Section 11 is a strict liability standard — plaintiffs only need to show the document was materially misleading, not that the company knew it was lying. Courts still require the plaintiff to sufficiently plead that the alleged misstatement was material and that their losses were causally linked to it.

By dismissing on these grounds, the court concluded the plaintiffs did not adequately plead that the alleged misstatements were material enough, or that the connection between those statements and investor losses was properly established at the pleading stage.

The Federal Case: Still Active

The state court dismissal is only one front. A separate federal class action, captioned Francis v. DLocal Limited, No. 23-cv-07501 (E.D.N.Y.), was filed in the Eastern District of New York and charges dLocal and certain of its top executive officers with violations of the Securities Exchange Act of 1934. That case covers the Argentina investigation angle and the Exchange Act claims (Rule 10b-5 securities fraud) rather than the IPO registration statement claims resolved in state court.

That lawsuit sought to represent purchasers of DLO securities between May 2, 2022 and May 25, 2023, the class period during which investors allege they were harmed by materially misleading statements. The status of that case should be verified through PACER for the most current position.

The Muddy Waters Report: The Catalyst Investors Should Know About

The Muddy Waters Research report from November 2022 was a pivotal moment. Muddy Waters is a well-known short-seller research firm that publishes reports alleging fraud at publicly traded companies — and when such reports hit, stocks often collapse.

The report alleged contradictory disclosures between two key subsidiaries’ accounts payable and accounts receivable, conflicting receivable disclosures, and a loan of $31.5 million by the company to defendant Kanovich and company president Jacobo Singer — raising accounting discrepancies that gave rise to concerns about how client funds were handled.

dLocal pushed back publicly, denying the fraud allegations and maintaining it had properly separated client funds. Whether those denials held up under judicial scrutiny is precisely what the dismissed state court case tested — and the court sided with dLocal at this stage.

What This Ruling Means for DLO Investors

No payout from this case. The state court dismissal means investors who purchased DLO shares at the IPO and held claims under the Securities Act of 1933 will not recover through this particular lawsuit. The case is over, and no settlement fund will be established from this track.

The federal case matters more now. Investors who purchased DLO shares during the May 2022–May 2023 class period — covering the Argentina investigation period — should focus on the status of Francis v. DLocal Limited in federal court, which involves different legal claims (Exchange Act fraud, not just IPO registration errors) and a different class period.

Broader context: Securities class action dismissals rose significantly in 2025, increasing 34% to 155 dismissals from 116 in 2024, as courts applied rigorous pleading standards under the Private Securities Litigation Reform Act of 1995. The dLocal dismissal fits within a broader trend of courts scrutinizing whether investor plaintiffs can sustain their claims past the pleading stage.

What Is the Private Securities Litigation Reform Act (PSLRA)?

The PSLRA is a 1995 federal law that raised the bar for securities fraud lawsuits. It requires plaintiffs to plead specific facts establishing: (1) that the defendant made a materially false or misleading statement; (2) that the defendant acted with intent to defraud (scienter); and (3) that the statement caused the plaintiff’s losses. These pleading standards make it harder to survive a motion to dismiss — which is one reason why securities class action dismissal rates have been rising across the industry.

Current Status & What Happens Next

The New York state court IPO case is closed following the March 25, 2025 dismissal. No appeal has been publicly reported.

The federal case (Francis v. DLocal Limited, E.D.N.Y.) covering the Argentina-related Exchange Act claims remains the live legal exposure. Investors with counsel in that matter should monitor docket activity through PACER or their legal representatives.

dLocal has not publicly commented on the state court dismissal beyond what is reflected in court proceedings.

FAQs: dLocal Securities Class Action Dismissal

Did investors win or lose this case?

 Investors lost this particular case. The court dismissed all claims in the New York state securities class action. There will be no recovery or payout from this lawsuit.

Who filed the lawsuit against dLocal?

 Multiple investor law firms filed class action complaints on behalf of investors who purchased DLO shares, including at the June 2021 IPO. The New York state case was led by plaintiffs under Sections 11 and 15 of the Securities Act of 1933.

Why did the court dismiss the case? 

The state court found plaintiffs did not adequately plead their claims that dLocal’s IPO offering documents were materially misleading regarding TPV (Total Processing Volume) and internal financial controls. Law360 reported the ruling on March 25, 2025.

Is there still any active lawsuit against dLocal? 

Yes. A separate federal class action — Francis v. DLocal Limited, No. 23-cv-07501 (E.D.N.Y.) — covers a different set of claims tied to the Argentine government investigation. That case’s current status should be confirmed through federal court records.

What was the dLocal IPO price and how much did investors lose? 

dLocal went public at $21.00 per share in June 2021 at a valuation of approximately $9.5 billion. The stock later fell more than 50% from its highs following the Muddy Waters report and the Argentina investigation news, resulting in hundreds of millions of dollars in investor losses.

What is TPV and why did it matter to investors? 

TPV (Total Processing Volume) is the total dollar value of payments processed through dLocal’s platform — the core business metric investors use to assess the company’s size and growth. Allegedly misstating this figure would directly affect whether the IPO was fairly priced.

Can investors still pursue claims?

 Investors who purchased DLO shares during the May 2, 2022 – May 25, 2023 class period may still have potential claims through the federal case in the Eastern District of New York. Investors should consult securities litigation counsel to assess their options.

Last Updated: April 20, 2026

This article is for informational purposes only and does not constitute legal or investment advice. Allegations in complaints are not findings of fact. All parties are presumed innocent unless and until proven otherwise in a court of law. Past legal outcomes do not predict future results in related proceedings.