Focus Media Holding Limited American Depositary Shares (ADS) (NASDAQ: FMCN) Investor Securities Class Action Lawsuit 11/27/2007

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Company Name(s): 
Focus Media Holding
Case Name: 
Focus Media Holding Shareholder Class Action Lawsuit 11/27/2007
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: FMCN
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
11/27/2007
Class Period Begin: 
09/27/2007
Class Period End: 
11/19/2007
Court of Filing: 
U.S. District Court for the Southern District of New York
Date Settled: 
12/16/2011
Settlement Amount: 
$2,000,000
Deadline to Participate in Settlement: 
04/05/2012
Summary: 

June 15, 2012 - The appeal filed by the lead plaintiff was withdrawn.

April 25, 2012 - The court approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissed the action with prejudice.

December 16, 2011 - The court preliminarily approved the settlement.

October 6, 2011 - Parties filed a stipulation of settlement.

April 29, 2010 - The lead plaintiff filed a notice of appeal.

March 30, 2010 - The court issued a judgment closing the case in its entirety.

March 29, 2010 - The court granted the defendants' motion to dismiss.

September 5, 2008 - The defendants filed a motion to dismiss.

June 23, 2008 - The lead plaintiff filed an amended consolidated complaint.

April 24, 2008 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

January 28, 2008 - A lead plaintiff motion was filed.

November 27, 2007 - An investor in American Depositary Shares (ADS) of Focus Media Holding Limited (NASDAQ: FMCN) filed a lawsuit in the U.S. District Court for the Southern District of New York against Focus Media Holding Limited over alleged violations of Federal Securities Laws in connection with the secondary public offering on or about November 7, 2007.

The complaint charges Focus Media Holding Limited and certain of its officers and directors with violations of the Exchange Act of 1933. Focus Media Holding Limited operates out-of-home advertising network using audiovisual television displays in the People’s Republic of China.

According to the complaint, on or about November 1, 2007, Focus Media Holding Limited filed a Form F-1/A Registration Statement with the Securities and Exchange Commission for the Secondary Offering. On or about November 6, 2007, the Prospectus with respect to the Secondary Offering, which forms part of the Registration Statement, became effective and more than 13.5 million shares of Focus Media Holding Limited’s ADSs (NASDAQ: FMCN) at $64.75 per ADS were sold to the public, thereby raising more than $888 million.

The complaint alleges that the registration statement and the prospectus contained inaccurate statements of material fact because they failed to disclose that Focus Media Holding Limited had made numerous acquisitions in its Internet advertising business division which were depressing its gross margins in that important division. On November 19, 2007, after the close of the market, Focus Media Holding Limited issued a press release announcing its financial results for the third quarter of 2007, the period ending September 30, 2007. Among other things, Focus Media Holding Limited reported that its gross margins for the third quarter of 2007 had declined due to several recent acquisitions. Following Focus Media Holding Limited’s earnings release, on November 20, 2007, the price of American Depositary Shares (ADS) of Focus Media Holding Limited (NASDAQ: FMCN) dropped from $57.15 per ADS to $52.00 per ADS on extremely heavy trading volume.