GSX Techedu Securities $9.5M Stock Class Action Settlement, Did You Lose Money on GSX Stock?

GSX Techedu Inc. and two former executives agreed to pay $9.5 million to settle a federal securities class action lawsuit alleging they made false and misleading statements about the company’s student enrollments and revenues, artificially inflating GSX stock prices. If you purchased GSX Techedu American Depositary Shares (ADSs) between June 6, 2019, and October 20, 2020, you may qualify for a cash payment. You must file a claim to receive any money. The claim deadline is May 30, 2026.

Quick Facts

Current Status and What Happens Next

• Proposed settlement — the court has not yet granted final approval. The settlement is currently open for claims while the court review continues.
• Opt-out deadline: May 28, 2026 — investors who want to preserve their right to sue GSX Techedu independently must exclude themselves before this date.
• Final approval hearing: June 4, 2026 — if the court approves the settlement, payments will go out after that hearing and after any appeals are resolved. The claim window remains open until May 30, 2026.

What Is the GSX Techedu Lawsuit About?

Plaintiff Wu and other investors filed the securities class action Wu v. GSX Techedu Inc. et al., Case No. 2:20-cv-04457-MEF-JRA, in the U.S. District Court for the District of New Jersey against GSX Techedu Inc., its former CEO Larry Xiangdong Chen, and former CFO Nan Shen. The lawsuit alleged these defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making materially false and misleading statements about GSX Techedu’s core business metrics — specifically its student enrollment numbers and revenue figures.

GSX Techedu, now known as Gaotu Techedu Inc., was a Chinese technology-driven education company that provided online K-12 after-school tutoring services in China. In February 2020, short-seller research firm Grizzly Research LLC published a report flagging multiple alleged problems with GSX Techedu’s reported enrollment and financial figures. The plaintiffs argued that throughout the class period, defendants overstated the company’s profitability, student enrollment, revenues, teacher qualifications, and teacher selection processes — statements that kept GSX’s stock price artificially inflated while investors bought in at elevated prices.

All three defendants denied any wrongdoing. They agreed to the $9.5 million settlement to avoid the costs, risks, and delays of continued litigation.

Related article: Balance Autism Data Breach Settlement, Did You Get a Notice? Here’s How to Claim Up to $4,400

Who Is Eligible to File a Claim?

The settlement covers all persons and entities who purchased or acquired publicly traded GSX Techedu ADSs during the class period and suffered damages as a result.

• You may qualify if you purchased or acquired GSX Techedu Inc. publicly traded American Depositary Shares (ADSs) between June 6, 2019, and October 20, 2020, inclusive.
• You may qualify if you purchased GSX ADSs in or traceable to the company’s Initial Public Offering (IPO) on or about June 6, 2019.
• You may qualify if you purchased GSX ADSs in or traceable to the Secondary Public Offering (SPO) on or about November 20, 2019.
• You may qualify whether you are an individual investor, a retirement fund, a pension fund, or an institutional investor — both individuals and entities are eligible.
• You may qualify if you are an agent, executor, trustee, or guardian filing on behalf of an eligible investor, provided you submit proof of your authority.
• You do not qualify if your only holdings were through a mutual fund — holding GSX securities indirectly through a mutual fund alone does not make you a class member.
• You do not qualify if your calculated recognized loss is $0 — for example, if you sold all your shares before April 3, 2020.
• You do not qualify if your calculated payment would be less than $10 — the administrator will not issue payments below this minimum threshold.

If you held GSX ADSs in an employer-sponsored retirement plan, your plan trustee must file on behalf of all participants — do not file individually.

How Much Can You Receive?

Your payment depends on how many ADSs you held, when you bought and sold them, and the total number of valid claims filed. The settlement administrator calculates each payment using a court-approved plan of allocation based on the estimated artificial inflation in GSX’s stock price at different points during the class period.

Estimated average recovery: approximately $0.20 per share before deductions, and approximately $0.12 per share after attorneys’ fees and expenses.

The plan uses different formulas depending on when you sold your shares:

The $9,500,000 settlement fund breaks down as follows:

If your total recognized losses calculate to zero or less, your recognized claim is $0 and you will not receive a payment. If total valid claims exceed the net fund, the administrator will reduce all payments proportionally on a pro rata basis.

How to File a Claim

Step 1 — Visit the official settlement website at gsxsecuritiessettlement.com and click “File a Claim Online” at secure.gsxsecuritiessettlement.com, or download the PDF claim form to mail your submission.

Step 2 — Enter your personal details including the last four digits of your Social Security number or your full taxpayer identification number.

Step 3 — Enter all your GSX ADS transaction details, including purchases and acquisitions from June 6, 2019 through January 15, 2021, all sales from June 6, 2019 through January 15, 2021, and shares held as of the close of trading on January 15, 2021.

Step 4 — Upload documentation to support your transactions. Acceptable proof includes brokerage account statements, transaction reports or confirmations, or authorized statements from your broker, financial advisor, or online trading platform that include all required transaction details.

Step 5 — Review your completed claim form and submit it online before May 30, 2026, or mail the completed paper form to: GSX Securities Settlement, c/o JND Legal Administration, P.O. Box 91131, Seattle, WA 98111. Mailed forms must be received by the administrator by the May 30, 2026 deadline.

Step 6 — Save your claim confirmation number or take a screenshot of your completed submission for your records.

Estimated time to complete: 10–20 minutes depending on the number of transactions to enter.

Important Deadlines and Dates

Frequently Asked Questions

Do I need a lawyer to file a claim in this settlement?

 No. You can file your claim directly at secure.gsxsecuritiessettlement.com without hiring your own attorney. Class counsel already represents all class members collectively at no individual cost to you. If you want independent legal advice about your specific transaction losses, you may hire your own lawyer at your own expense.

Is this GSX Techedu settlement legitimate? 

Yes. The settlement is a court-supervised securities class action, Wu v. GSX Techedu Inc. et al., Case No. 2:20-cv-04457-MEF-JRA, filed in the U.S. District Court for the District of New Jersey. The official settlement website is gsxsecuritiessettlement.com, administered by JND Legal Administration. Contact the administrator directly at 855-779-3369 or [email protected] to verify any communication you receive.

When will I receive my payment? 

The final approval hearing is scheduled for June 4, 2026. If the court approves the settlement and no appeals follow, JND Legal Administration will process all claims submitted by May 30, 2026 and distribute payments after that process concludes. Securities settlement payments typically take several months to distribute after final approval and may take 4–9 months from the claim deadline.

What if I miss the May 30, 2026 claim deadline?

 If you do not file a claim by May 30, 2026, you will not receive any payment from this settlement. You will still be bound by the settlement’s release of claims against GSX Techedu and the individual defendants unless you opted out before May 28, 2026. File as early as possible — do not wait until the last day in case technical issues arise.

Will this settlement payment affect my taxes?

 Securities fraud settlement payments are generally treated as a return of capital or capital gain depending on your individual tax situation, the nature of your original investment, and how the IRS classifies the specific damages. JND Legal Administration will issue appropriate tax forms. Consult a qualified tax professional or CPA to understand how to report your payment correctly on your federal and state tax returns.

What did GSX Techedu allegedly misrepresent to investors? 

The lawsuit alleged GSX Techedu overstated multiple core business metrics throughout the class period — specifically its student enrollment numbers, revenues, teacher qualifications, and teacher selection processes. Plaintiffs claimed these misrepresentations kept GSX’s ADS price artificially inflated, causing investors to purchase shares at prices higher than their true value. The short-seller report published by Grizzly Research on February 25, 2020, was among the first public disclosures to flag these alleged discrepancies.

What is GSX Techedu called today and can I still file? 

GSX Techedu Inc. has since rebranded as Gaotu Techedu Inc. The company change of name does not affect your eligibility. If you purchased GSX ADSs under the ticker symbol GSX between June 6, 2019, and October 20, 2020, you may still file a valid claim at gsxsecuritiessettlement.com before May 30, 2026.

What is the difference between the opt-out deadline and the claim deadline? 

These are two separate deadlines with different purposes. The opt-out deadline (May 28, 2026) is your last chance to exclude yourself from the settlement and keep your right to sue GSX Techedu independently. The claim deadline (May 30, 2026) is your last day to submit a claim form and receive a payment from this settlement. Missing either deadline has permanent consequences — act before both dates.

Sources and References

1. Official Settlement Website — gsxsecuritiessettlement.com
2. Official Online Claim Portal — secure.gsxsecuritiessettlement.com
3. Class Notice PDF — Official Court Document

Investors who traded other Chinese company ADSs during similar periods of alleged misrepresentation may also want to review the DiDi Global $740 million securities class action settlement for investors who bought DiDi ADSs during its June 2021 IPO with a claim deadline of April 6, 2026. Investors in pharmaceutical stocks who suffered similar losses may also check eligibility under the Catalent $78 million securities class action settlement with a claim deadline of May 26, 2026.

Last Updated: March 14, 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney.

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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