Wonder Auto Technology Inc (NASDAQ: WATG) Investor Securities Class Action Lawsuit 05/31/2011

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Company Name(s): 
Wonder Auto Technology
Case Name: 
Wonder Auto Technology Shareholder Class Action Lawsuit 05/31/2011
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: WATG
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
05/31/2011
Class Period Begin: 
05/14/2008
Class Period End: 
05/06/2011
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
08/01/2011
Date Settled: 
05/31/2013
Settlement Amount: 
$3,000,000
Deadline to Participate in Settlement: 
04/15/2013
Summary: 

May 31, 2013 - The court approved the settlement and entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissing the action with prejudice.

May 29, 2013 - The court held a final settlement hearing.

January 15, 2013 - The court preliminarily approved the settlement.

January 11, 2013 - Parties filed a stipulation of settlement.

December 5, 2011 - The lead plaintiff filed an amended complaint on behalf of all investors of who purchased Wonder Auto Technology Inc (OTC: WATG) common shares between March 20, 2009 to May 6, 2011. The plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between March 20, 2009 to May 6, 2011.

October 3, 2011 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

August 1, 2011 - Lead plaintiff motions were filed.

May 31, 2011 - An investor in shares of Wonder Auto Technology Inc (OTC: WATG) filed a lawsuit in the U.S. District Court for the Southern District of New York against Wonder Auto Technology Inc over alleged violations of Federal Securities Laws.

The lawsuit by an investor follows a trading halt of Wonder Auto Technology Inc (OTC: WATG) shares from May 6, 2011. According to the complaint the plaintiff alleges on behalf of persons who purchased Wonder Auto Technology Inc securities from May 14, 2008 through May 6, 2011 that against Wonder Auto Technology Inc (Nasdaq: WATG) and certain of its officers violated the Securities Exchange Act of 1934 between May 14, 2008 and May 6, 2011 by issuing false and/or misleading statements, as well as failing to disclose material adverse facts about its business, operations and prospects.

Wonder Auto Technology Inc reported a substantial increase in its 12months Total Revenue between 2006 and 2009. Wonder Auto Technology, Inc. reported a 12months Total Revenue that almost tripped. Wonder Auto Technology Inc’s 12months Total Revenue increased from $72.15million in 2006 to $211.2millio in 2009. For the first three quarters in 2010 Wonder Auto Technology Increported a combined nine months Total Revenue that almost succeeded its 12months Total Revenue from 2009. Wonder Auto Technology Inc reported a combined nine months Total Revenue for the first three quarters of $210.91million.

Wonder Auto Technology Inc also reported an increase in its Net Income from $0.71million in 2006, respectively a Net Loss of $3.75million in 2007 to a Net Income of $22.86million in 2009. For the first three quarters in 2010 Wonder Auto Technology Inc reported a combined nine months Net Income that exceeded its 12months Net Income from 2009. For the first three quarters in 2010 Wonder Auto Technology Inc reported a combined nine months Net Income of $24.37million.

Shares of Wonder Auto Technology Inc (Public, NASDAQ: WATG) increased from as low as $1.02 in February 2006 to $12.59 per share in January 08. WATG shares fell during the end of 2008 and the beginning of 2009 to as low as $2.11 in January 09. However WATG shares increased during 2009 to as high as almost $15 per share. Since then WATG shares fell to under $8 in the end of 2010.

On March 1, 2011, Wonder Auto Technology Inc disclosed that its previously issued financial statements for fiscal years 2008 and 2009, as well as its interim reports for those periods "should no longer be relied upon due to a cutoff error regarding timing of revenue in such periods."

On March 25, 2011, Wonder Auto Technology Inc disclosed that it had "received a notification letter from the NASDAQ Stock Market indicating that the Company was not in compliance" with NASDAQ's continued listing requirements as it failed to timely file its annual report on a Form 10-K for the fiscal year ended December 31, 2010. Then May 6, 2011, The NASDAQ Stock Market announced that trading was halted in Wonder Auto Technology Inc (Nasdaq: WATG) for "additional information requested" from Wonder Auto Technology Inc at a last price of $5.42.

On May 12, 2011 Wonder Auto Technology Inc announced that its Audit Committee, with the assistance of professional advisers, has undertaken an internal investigation concerning certain investment and acquisition transactions.

Wonder Auto Technology Inc said that as a result of the pending restatement of its financial statements for fiscal years 2008, 2009 and 2010, and for the quarters ended March 31, June 30 and September 30, 2009 and 2010, and the investigation, Wonder Auto Technology Inc has not filed its Form 10-K for the fiscal year ended December 31, 2010 and does not expect to be able to file its Form 10-Q for the quarter ended March 31, 2011 by the filing deadline of May 10, 2011.

On May 20, 2011, the Company disclosed that the Audit Committee's investigation will continue until at least June 2011 and was commenced "in response to a report alleging that the Company had engaged in several transactions without properly disclosing their related-party nature."