Shein Discloses US FTC Probe Ahead of Hong Kong IPO
The company said in the document that it cannot predict the outcome of the investigation or the timing of its outcome.
“The outcome of the investigation, whether in settlement or otherwise, may require us to make significant monetary payments that could have a material adverse effect on our financial condition and results of operations,” Shein said in the document.
CNBC reported on the disclosure Tuesday (July 28), saying that this appears to be the first time the probe was made public and that the nature of the probe is unclear.
The report said that Shein’s listing in Hong Kong was recently approved but the date of the start of trading is unclear.
Reuters reported Tuesday that an FTC spokesperson confirmed that the agency is conducting a consumer protection investigation into Shein.
The report said Shein was sued by four California counties over shipping delays and paid $700,000 to settle that lawsuit last year.
The Los Angeles County District Attorney’s Office said in a July 2025 press release that the lawsuit alleged that Shein took more than a month to ship online orders and failed to provide consumers with adequate delay notices or an offer of refunds, as required by California law.
Shein also faces an investigation into its supply chain and manufacturing practices that was announced in December by Texas Attorney General Ken Paxton, according to Tuesday’s Reuters report.
The Texas Office of the Attorney said in a Dec. 1 press release: “The investigation will determine whether Shein’s supply chain and manufacturing practices violate Texas law by using toxic or hazardous materials, misleading consumers about product safety, and misleading consumers about ethical sourcing. The investigation will also examine the company’s data collection and privacy practices, which may pose risks to millions of American consumers.”
In February, Paxton sued Shein, alleging that the company and its affiliates unlawfully sold toxic products to consumers and unlawfully exposed consumers’ sensitive personal data to the Chinese Communist Party.
