from Wikimedia/Thomas Lombard

Alibaba HQ

China's Alibaba Group Holding, one of the hottest initial public offerings in the United States last fall, is being sued by San Diego law firms as well as other firms across America.

Early this year, after Alibaba stock had soared, the Chinese regulatory body, the "State Administration of Industry and Commerce," issued a white paper accusing Alibaba of selling counterfeit goods and restricted weapons, faking transactions to fatten reported sales volume, and engaging in anticompetitive behavior. Staffers had taken bribes, charged the regulator.

San Diego law firm Robbins Geller Rudman & Dowd filed a suit against Alibaba in New York early this year. San Diego's Finkelstein & Krinsk filed suit this month in San Diego federal court. That suit charges that Alibaba had met with the regulator in July of last year, two months before its red-hot public offering. The stock shot up to above $119 initially and recently has been around $88.

Prior to the disclosure of the regulatory white paper, two top Alibaba executives dumped 368 million U.S. shares in the company, raking in more than $25 billion, says the Finkelstein & Krinsk suit. That suit is a putative class action representing investors who bought Alibaba shares between October 21 of last year and the present.

The suit names ten Alibaba executives — not 40, as show up in the old folk tale, Ali Baba and the Forty Thieves.