Lihua International Inc (NASDAQ: LIWA) Investor Securities Class Action Lawsuit 05/01/2014

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Company Name(s): 
Lihua International
Case Name: 
Lihua International Shareholder Class Action Lawsuit 05/01/2014
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: LIWA
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
05/01/2014
Class Period Begin: 
08/09/2012
Class Period End: 
04/30/2014
Court of Filing: 
U.S. District Court for the Central District of California
Deadline To File for Lead: 
06/30/2014
Settlement Amount: 
$2,865,000
Deadline to Participate in Settlement: 
10/04/2017
Summary: 

March 22, 2017 - Parties filed a stipulation of settlement.

March 31, 2016 - The court granted in part and denied in part defendants' motion to dismiss.

August 11, 2014 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

July 3, 2014 - The case was transferred to the U.S. District Court for the Southern District of New York.

June 30, 2014 - Lead plaintiff motions were filed.

May 1, 2014 - An investor in shares of Lihua International Inc (NASDAQ: LIWA) filed a lawsuit in the U.S. District Court for the Central District of California against Lihua International Inc over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between August 9, 2012 through April 30, 2014.

According to the complaint the plaintiff alleges on behalf of all persons or entities who purchased or otherwise acquired securities of Lihua International Inc (NASDAQ: LIWA) between August 9, 2012 through April 30, 2014, that Lihua International Inc and certain of its officers and directors violated Federal Securities Laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

More specifically, the plaintiff alleges that Lihua International Inc's business experienced a significant downturn starting from late 2012, that Lihua International Inc’s production activities slowed down dramatically in 2013, and have almost ceased after January 31, 2014, that Lihua International Inc’s warehouse has been seized by the local PRC court, and that Defendant Jianhua Zhu, Lihua's Chairman and CEO, attempted to move inventory in order to hide them from creditors, and is now being investigated by the police for larceny.

Lihua International Inc reported that its annual Total Revenue rose from $161.54 million in 2009 to $853.77 million in 2012 and that its respective Net Income increased from $13.73 million to $57.94 million.

In a recent report, allegations have been made that Lihua International Inc's CEO and Chairman of Lihua International Inc's Board may have diverted or attempted to divert Lihua International Inc assets. The report also alleges that Lihua International Inc’s production has almost ceased and that local Chinese courts have seized Lihua International Inc’s warehouse.

On April 30, 2014 Lihua International Inc said that the Board of Directors of Lihua International Inc is aware of a decline in Lihua International Inc’s (NASDAQ: LIWA) stock price and published allegations that Mr. Zhu Jianhua, Lihua International Inc’s CEO and Chairman of Lihua International Inc’s Board, may have diverted or attempted to divert Lihua International Inc assets and as a result may have been the subject of action by local law enforcement. Lihua International Inc said that although they have not yet been able to verify this information, the Board’s Audit Committee is taking steps to determine the facts and will take appropriate action and that if the allegations prove true, Lihua International Inc’s financial statements may contain material misstatements.

Shares of Lihua International Inc (NASDAQ: LIWA) declined from $4.74 per share on April 29, 2014, to $2.08 per share on April 30, 2014.