MEMORANDUM AND ORDER In this class action under the Securities Act of 1933, the plaintiff alleges that documents issued in connection with the initial public offering (“IPO”) of shares in defendant BlueCity Holdings Limited (“BlueCity”) contained false and misleading statements. Of the thirteen defendants, three — Blue City, Cogency Global, Inc. (“Cogency”), and Colleen A. DeVries — have moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).1 For the following reasons, the motion is granted. I The following facts are drawn from the amended complaint and the SEC filings and other documents upon which it relies. The allegations of the amended complaint are taken as true and in the light most favorable to the plaintiff “unless conclusory or contradicted by more specific allegations or documentary evidence.” NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 149 n.1 (2d Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009), and Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)). BlueCity operates an online platform for LGBTQ users in Asia. Founded in 2011 by defendant Baoli Ma (also known as “Geng Le”), BlueCity also offers a smartphone-based dating app — “Blued” — that caters to the LGBTQ community. More than 90 percent of BlueCity’s revenues come from China, a market whose government has an uneven track record towards LGBTQ individuals. Although homosexual activity is not criminalized, same-sex couples cannot marry or adopt. Sex-reassignment surgery is available but highly restricted; identifying as transgender is still considered a mental disorder. Reflecting that ambivalent attitude, a previous LGBTQ online platform hosted by Geng Le was shut by the Chinese government several times. China’s attitude towards LGBTQ issues is reflected in its censorship laws. In 2016 the Chinese government began to include gay content in what it considered “vulgar, immoral and unhealthy content” in television and online media. Am. Compl. 66. A year later the China Netcasting Services Association (“CNSA”) issued a regulation defining gay content as “vulgar,” “obscene,” and “pornographic,” placing it in the same category as incest, sexual abuse and rape. Id. 72. Pursuant to this change in policy, the government shut down thousands of websites and blogs, and dozens of internet platforms and smartphone apps, including “Zank” and “Rela,” two of the most popular LGBTQ dating sites in China, and “Peepla,” a popular livestreaming app known for its gay content. By its own admission, BlueCity works “cautiously” in the current political environment in China. Am. Compl. 55. It has made several changes to its business since 2016 and 2017. On its public-facing materials, it has removed words like gay and its Chinese equivalent (tongzhi) and emphasized its health promotion activities (such as AIDS/HIV prevention). What it once described as the “biggest gay portal website for Chinese people” is now the “World’s Leading Interest-Based Social & Health Education Network.” Id.
