Fast fashion giant Shein disclosed that its U.S. business is under investigation by the Federal Trade Commission, according to documents tied to its upcoming Hong Kong IPO. The Chinese-founded company said it is actively cooperating with the U.S. regulator but did not specify the nature of the probe. Shein warned that the investigation’s outcome, whether settled or not, could require significant monetary payments that may have a material adverse effect on its financial condition and results of operations. The FTC, America’s top consumer protection agency, has previously investigated companies for dark patterns including countdown timers, gamified discounts and confusing cancellation policies, tactics Shein uses on its app. Shein’s listing in Hong Kong was recently approved, though the trading start date remains unclear.
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