Yuhe International Inc (NASDAQ: YUII) Investor Securities Class Action Lawsuit 06/24/2011

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Company Name(s): 
Yuhe International
Case Name: 
Yuhe International Shareholder Class Action Lawsuit 06/24/2011
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: YUII
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
06/24/2011
Class Period Begin: 
12/31/2009
Class Period End: 
06/17/2011
Class Period Begin: 
10/20/2010
Class Period End: 
10/20/2010
Court of Filing: 
U.S. District Court for the Southern District of Florida
Deadline To File for Lead: 
08/23/2011
Date Settled: 
06/10/2014
Settlement Amount: 
$2,700,000
Deadline to Participate in Settlement: 
07/31/2014
Summary: 

June 10, 2014 - 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.

March 7, 2014 - The court preliminarily approved the settlement.

January 6, 2014 - Parties filed a stipulation of settlement.

July 10, 2013 - The court denied in part and granted in part the defendants' motion to dismiss.

April 25, 2013 - The defendants filed a motion to dismiss.

April 4, 2013 - The lead plaintiff filed a second amended consolidated complaint.

March 5, 2013 - The court denied in part and granted in part the defendants' motions to dismiss.

September 7, 2012 - The defendants filed numerous motions to dismiss.

August 3, 2012 - The lead plaintiff filed a supplemental amended consolidated complaint.

July 27, 2012 - The court ordered the June 11, 2012 case consolidated.

June 11, 2012 - Another investor filed a complaint in the U.S. District Court for the Central District of California.

May 10, 2012 - The lead plaintiff filed an amended consolidated complaint.

March 2, 2012 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

October 5, 2011 - The complaint filed on June 24, 2011 was voluntarily dismissed without prejudice.

August 25, 2011 - Lead plaintiff motions were filed.

July 1, 2011 - Another investor filed a complaint in the U.S. District Court for the Central District of California on behalf of investors who purchased Yuhe International Inc (NASDAQ: YUII) common shares during the period from December 31, 2009 through June 17, 2011. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between December 31, 2009 through June 17, 2011.

June 24, 2011 - An investor in shares of Yuhe International Inc (NASDAQ: YUII) filed a lawsuit in U.S. District Court for the Southern District of Florida against Yuhe International Inc over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff alleges on behalf of investors who purchased the securities of Yuhe International Inc (NASDAQ: YUII) during the period from December 31, 2009 through June 23, 2011, that Yuhe International Inc and and its officers and directors violated Federal Securities Laws by issuing false and misleading information to investors about the financial and business condition of Yuhe International Inc.

The Complaint alleges that Yuhe International Inc’s financial results as reported to the U.S. Securities and Exchange Commission (“SEC”)for the fiscal years ended 2009 and 2010 were materially false and misleading. Yuhe International Inc lied to investors about its purported acquisition of 13 breeder farms from Weifangshi Dajiang Qiye Group Co. Ltd. , and Yuhe International Inc’s business was not growing at the rate represented by defendants.

Yuhe International Inc reported a significant increase in its annual Revenue while its Net Income substantially decreased. It reported an increase in its 12months Total Revenue from $34.63million in 08 to $67.48million in 2010, while its Net Income fell from $10.52million in 08, respectively $13.79million in 09 to a Net Loss of $34.34million in 2010.

For the first quarter in 2011 Yuhe International Inc then reporter a quarterly Revenue of $26.86million compared to $11.76million on year earlier, or an increase by over 100% Its reported quarterly Net Income rose from $2.93million for the first quarter in 2010 to $6.07million for the first quarter in 2011, or an increase by over 100% as well.

Shares of Yuhe International Inc (NASDAQ: YUII) rose from $6 in December 09 to as high as $11.35 in February, respectively $10.41 in November 2010, but then fell to as low as $1.21 on June 17, 2011 following a report by the GeoInvesting Team raised questions into the financial statements, recent acquisitions, and overall validity as a business of Yuhe International Inc.

Among the report’s numerous findings, GeoInvesting said it believes they have compelling evidence that Yuhe International Inc never reached or executed an agreement with the owner of the Dajiang13 breeder farms, as stated in December 2009 and it lead GeoInvesting to believe that the $12.1 million deposit allegedly paid to acquire the farms may have been misappropriated.

The same day, on June 17, NASDAQ halted trading of Yuhe International Inc (NASDAQ: YUII) shares and has requested more information.

On June 23, 2011, Yuhe International Inc announced its auditor had resigned because of Yuhe International Inc “management’s misrepresentation and failure to disclose material facts surrounding certain acquisition transactions and off balance sheet related party transactions.” Moreover, the auditor stated that its audited financial statements of Yuhe International Inc. for the year ended December 31, 2010 should no longer be relied upon and that the auditor no longer will be associated with the financial statements.