Telestone Technologies Corporation (OTC: TSTC) Investor Securities Class Action Lawsuit 02/02/2015

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Company Name(s): 
Telestone Technologies
Case Name: 
Telestone Technologies Shareholder Class Action Lawsuit 02/02/2015
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: TSTC
OTCMKTS: TSTC
OTC: TSTC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
02/02/2015
Class Period Begin: 
03/31/2010
Class Period End: 
04/16/2013
Court of Filing: 
U.S. District Court for the District of New Jersey
Deadline To File for Lead: 
04/03/2015
Date Settled: 
09/25/2017
Settlement Amount: 
$1,250,000
Deadline to Participate in Settlement: 
02/21/2018
Summary: 

September 25, 2017 - The court preliminarily approved the settlement.

February 24, 2017 - Parties filed a stipulation of settlement.

January 19, 2016 - The court ordered that all claims against certain defendants are dismissed without prejudice.

December 21, 2015 - The court denied defendants' motion to dismiss.

October 2, 2015 - Defendants filed a motion to dismiss.

August 17, 2015 - The lead plaintiff filed an amended complaint.

May 14, 2015 - Lead plaintiff and lead counsel were appointed.

April 3, 2015 - Lead plaintiff motions were filed.

February 2, 2015 - An investor in shares of Telestone Technologies Corporation (OTC: TSTC) filed a lawsuit in the U.S. District Court for the District of New Jersey over alleged violations of Federal Securities Laws by Telestone Technologies Corporation in connection with certain allegedly false and misleading statements made between March 31, 2010 and April 16, 2013.

According to the complaint the plaintiff alleges on behalf of purchasers of Telestone Technologies Corporation (OTC: TSTC) common shares between March 31, 2010 and April 16, 2013, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between March 31, 2010 and April 16, 2013, Telestone Technologies Corporation reportedly earned almost all of its revenues from sales to the three largest Chinese telecommunications providers – China Unicom, China Mobile, and China Telecom – the so-called Big 3, while in fact, Telestone Technologies Corporation only collected a small fraction of its purported sales to the Big 3, and internally determined both that the Big 3 were routinely breaching their contractual obligations to Telestone Technologies Corporation and that there was little Telestone Technologies Corporation could do about it. The plaintiff alleged that revenues from sales to the Big 3 were thus not reasonably certain to be collectable, and should not have been recognize and that the market gradually learned that there were collectability issues with Telestone Technologies Corporation’s revenues when its accounts receivable ballooned, leading to drops in Telestone Technologies Corporation's share price of 19.0%, on May 15, 2012, 14.8%, on November 19, 2012, and 64.2% on June 3, 2013.

Telestone Technologies Corporation reported that its annual total Revenue declined from $131.65 million in 2010 to $109.06 million in 2011 and that its respective Net Income decreased from $24.95 million to $14.93 million. Shares of Telestone Technologies Corporation (OTC: TSTC) declined from as high as $19.94 per share to $0.001 per share on December 1, 2014.