SearchMedia Holdings Limited (AMEX: IDI) Investor Securities Class Action Lawsuit 09/13/2010

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Company Name(s): 
SearchMedia
Case Name: 
SearchMedia Class Action Lawsuit 09/13/2010
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
AMEX: IDI
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
09/13/2010
Class Period Begin: 
04/01/2009
Class Period End: 
08/20/2010
Court of Filing: 
U.S. District Court for the Southern District of Florida
Date Settled: 
04/23/2012
Settlement Amount: 
$2,750,000
Deadline to Participate in Settlement: 
06/22/2012
Summary: 

February 4, 2013 - The court approved the distribution of the net settlement fund.

April 24, 2012 - The court approved the partial settlement and partially dismissed the case with prejudice.

January 10, 2012 - The court preliminarily approved a partial settlement.

November 30, 2011 - Parties filed a stipulation of settlement.

August 8, 2011 - The court granted the defendants' motion to dismiss, dismissing without prejudice counts I and II of the amended complaint granting plaintiff leave to file an amended complaint.

May 2, 2011 - The defendants filed a motion to dismiss.

April 11, 2011 - The lead plaintiff filed an amended complaint.

December 15, 2010 - The lead plaintiff and lead counsel were appointed.

November 15, 2010 - Lead plaintiff motions were filed.

September 13, 2010 - An investor in sahres of SearchMedia Holdings Limited (AMEX: IDI) filed a lawsuit in the U.S District Court for the Central District of California against SearchMedia Holdings Limited over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between April 1, 2009 and August 20, 2010.

SearchMedia Holdings Limited, formerly Ideation Acquisition Corp, located in Beverly Hills, California, is a blank check company formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more businesses. On October 30, 2009, Ideation Acquisition Corp completed the acquisition of SearchMedia International Limited (a purported nationwide multi-platform media company in China) and changed its name to SearchMedia.

According to the complaint the plaintiff alleges that SearchMedia Holdings Limited and certain of its officers and directors violated the Securities Exchange Act of 1934. Specifically, the complaint alleges that SearchMedia Holdings Limited issued material misstatements and/or omissions in the joint proxy statement and prospectus dated October 5, 2009, and other public statements between April 1, 2009 and August 20, 2010 related to the acquisition of SearchMedia International Limited by Ideation Acquisition Corp and SearchMedia International Limited.

Then on August 20, 2010, SearchMedia Holdings Limited announced that the historical financial statements of SearchMedia International Limited for the 2007 and 2008 fiscal years would have to be restated and that the financial statements from these periods should no longer be relied upon. SearchMedia Holdings Limited also indicated that it estimated that revenue in 2007 and 2008 had been overstated by approximately $6 million and $25 million, respectively. Upon this news, so the lawsuit, Holdings Limited’s stock fell nearly 23%, to close on August 20, 2010, at $2.62 per share. Over the next few days, SearchMedia's stock continued to decline and closed at $1.70 per share on August 23, 2010, a 50% decline from the closing price of $3.40 per share on August 19, 2010. SearchMedia Holdings Limited shares (IDI) traded recently at $2.41 per share, down from its 52weekHigh of $8.71 per share.