The lawsuit, filed by Levi & Korsinsky, LLP, centers on claims that Qfin leadership misled shareholders regarding the stability of loan portfolios and asset quality. While Zheng publicly touted proactive underwriting and stable performance as recently as May 2026, the company later disclosed that a nationwide regulatory crackdown on the collection industry had severely hampered operations. This discrepancy allegedly contributed to a sharp decline in share value, with Qfin’s American depositary shares dropping 18.91%—or $2.18—on August 26, 2026, following a grim financial forecast.

Zheng, who transitioned to the CEO role on September 21, 2026, is named as a defendant for his oversight of risk strategy and public statements made during the class period. The complaint asserts that his assurances were disconnected from the reality of the company's deteriorating asset quality, which J.P. Morgan analysts later characterized as a sharp decline. Investors seeking to participate in the action must act before the November 27, 2026, lead plaintiff deadline to pursue potential recovery for losses incurred during the period of alleged inflation in stock prices.