U.S. Securities and Exchange Commission (SEC)
Official Release: https://www.sec.gov/files/litigation/admin/2026/34-106344.pdf
NEWS: According to the SEC's order, certain Dada employees arranged customer sales contracts and corresponding vendor purchase contracts for virtually identical amounts, without credible supporting records or evidence that services were provided. In some cases, customers and vendors had undisclosed connections. The transactions helped Dada report revenue within previously issued guidance; without them, the company's revenue would have fallen below its guidance in each of the fourth quarter of 2022 and the first three quarters of 2023. In the second and third quarters of 2023, the SEC calculated revenue overstatements of 8.24% and 9.34% of corrected revenue.
Dada discovered the transactions through a routine internal audit in November 2023 and disclosed its independent review in March 2024. The SEC also found weaknesses in internal accounting controls, including insufficient risk monitoring, expenditure controls, and segregation of duties in vendor management. It ordered Dada to cease and desist from further violations and pay a $500,000 penalty. The SEC considered the company's remediation and cooperation. Dada consented to the order without admitting the findings; the order notes that Dada went private in June 2025 but remains a legal entity.
KEY POINTS:
- The SEC issued the settled order on September 11, 2026; File No. 3-22716, AAER-4600.
- The order covers sham marketing transactions from October 2022 through September 2023.
- The SEC found approximately $80 million in revenue overstatement and $81 million in overstated operating and support costs.
- Dada was ordered to pay a $500,000 civil penalty and cease and desist from further violations.
- Dada consented without admitting the findings; the SEC credited its internal review, remediation, and cooperation.