China Finance Online Co (ADR) (NASDAQ: JRJC) Investor Securities Class Action Lawsuit 06/05/2015

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Company Name(s): 
China Finance Online
Case Name: 
China Finance Online Shareholder Class Action Lawsuit 06/05/2015
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: JRJC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
06/05/2015
Class Period Begin: 
04/29/2013
Class Period End: 
06/03/2015
Court of Filing: 
U.S. District Court for the Central District of California
Deadline To File for Lead: 
08/04/2015
Date Settled: 
11/18/2016
Settlement Amount: 
$3,000,000
Deadline to Participate in Settlement: 
03/03/2017
Summary: 

November 18, 2016 - The court preliminarily approved the settlement.

August 15, 2016 - Parties filed a stipulation of settlement.

April 8, 2016 - Defendants filed a motion to dismiss.

March 9, 2016 - The lead plaintiffs filed a notice of voluntary dismissal of certain defendants without prejudice.

December 28, 2015 - The lead plaintiffs filed a second amended complaint.

November 13, 2015 - The lead plaintiffs filed an amended complaint.

September 14, 2015 - Lead plaintiffs and lead counsel were appointed.

August 4, 2015 - Lead plaintiff motions were filed.

June 5, 2015 - An investor in American Depository Shares of China Finance Online Co (ADR) (NASDAQ: JRJC) filed a lawsuit in the U.S. District Court for the Central District of California over alleged violations of Federal Securities Laws by China Finance Online Co in connection with certain allegedly false and misleading statements made between May 6, 2014 and June 3, 2015.

According to the complaint the plaintiff alleges on behalf of purchasers of China Finance Online Co (ADR) (NASDAQ: JRJC) common shares between May 6, 2014 and June 3, 2015, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between May 6, 2014 and June 3, 2015 defendants made allegedly false and/or misleading statements and/or allegedly failed to disclose that: China Finance Online Co’s Chairman of the Board of Directors and Chief Executive Officer Zhiwei Zhao had an indirect equity interest in Langfang Developer at the time of the Company’s investment, that Zhiwei Zhao suddenly resigned from his positions at three key Chinese Variable Interest Entities of China Finance Online, and that as a result of the foregoing, China Finance Online Co’s public statements were materially false and misleading at all relevant times.

China Finance Online Co reported that its annual Total Revenue rose from $29.60 million in 2012 to $83.70 million in 2014 and that its Net Loss of $46.62 million in 2012 declined to a Net Loss of $7.17 million in 2014.

On June 3, 2015, a report was published asserted among other things, that the most current SAIC records show Chairman and CEO Zhiwei Zhao suddenly resigned from his positions at three key Chinese VIE subsidiaries of China Finance Online Co over the past few months, that Chinese media reports exposing the detention of China Finance Online Co independent director Rongquan Leng prompted China Finance Online Co to announce his resignation, without addressing his alleged detention;, and that Ling Wang, a former long-time China Finance Online Co director and associate of Zhao, fled China in 2014, leaving his company indebted to China Finance Online Co for $25 million.

On June 4, 2015, China Finance Online Co responded to the allegations and said that the report contains numerous errors of facts, misleading speculations and malicious interpretations of events.

Shares of China Finance Online Co (ADR) (NASDAQ: JRJC) declined on June 4, 2015 to as low as $3.90 per share.