Qiao Xing Universal Telephone, Inc. - Securities Class Action

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Stanford Law School

Qiao Xing Universal Telephone, Inc. Summary: The complaint alleges violations of the federal securities laws by Xing and certain of its executives. Specifically, as alleged in the Complaint, on July 17, 2007, before the opening of trading, Xing disclosed, among other things, that in connection with the audit of the financial statements of a Company subsidiary, certain misstatements for the years 2005, 2004 and 2003 were identified that were not initially detected through the Company's internal control over financial reporting and that, as a result, management has decided to restate the Company's consolidated financial statements for the years ended December 31, 2005, 2004 and 2003. As further alleged, during the Class Period, Xing overstated its reported net income for the years ended December 31, 2005 and 2004 by 2% and 93%, respectively, and for the year ended December 31, 2003, Xing understated its reported net loss by 210%.

The complaint further alleges that on July 17, 2007, the Company filed its annual report for the year ended December 31, 2006 on Form 20-F with the SEC that stated that the misstatements in the financial statements resulted from certain deficiencies in the Company's system of internal controls over financial reporting.

In response to these announcements, on July 17, 2007, the price of Xing stock declined from $13.97 per share at the close of trading on July 16, 2007, to close at $11.04 per share, a decline of approximately 21%, on extremely heavy trading volume.

As summarized by the Company’s FORM 20-F for the fiscal year ended December 31, 2007, by Order, dated November 1, 2007, Judge Denise Cote consolidated the five cases and appointed lead plaintiff and lead plaintiff’s counsel. A mediation was held on January 10, 2008 in front of Magistrate Judge Henry Pitman and the parties agreed to settle the case for $2.4 million. The Company’s D&O insurance carrier agreed to contribute $300,000 to the settlement. A Stipulation of Settlement was executed on February 25, 2008. The Stipulation of Settlement was filed with the Court on February 26, 2008 and the preliminary approval order was signed on April 2, 2008. The final fairness hearing is scheduled for July 11, 2008.

According to a press release dated on July 15, 2008, Qiao Xing Universal Telephone, Inc. (Nasdaq: XING) announced that the U.S. District Judge Denise L. Cote gave her final approval of the settlement of the class action against Qiao Xing Universal Telephone, Inc. and its directors and officers. The Final Approval Order and Judgment was signed and entered on the same day. The settlement amount for the class action was $2,400,000. The Company's directors and officers insurance carrier contributed $300,000 towards the settlement. The Company has accrued a $2,100,000 non-operating loss in its 2007 consolidated financial statements in connection with the settlement. This loss had no material impact on the consolidated results of the Company for the year ended December 31, 2007.

On January 22, 2010, an order authorizing distribution of net settlement fund, inclusion of late claims, payment of settlement administration expenses, and donation of unclaimed funds was entered by the Court.

INDUSTRY CLASSIFICATION:
SIC Code: 3661
Sector: Technology
Industry: Communications Equipment

COMPANY/ISSUER NAME:	Qiao Xing Universal Telephone, Inc.
COMPANY/ISSUER TICKER:	XING
COMPANY WEBSITE:	http://www.qiaoxing.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Lawrence Mally, et al. v. Qiao Xing Universal Telephone, Inc., et al.

COURT: S.D. New York	DOCKET NUMBER: 07-CV-07097
JUDGE NAME: Hon. Denise L. Cote
DATE FILED: 08/09/2007	SOURCE: Notice of Filing
CLASS PERIOD START: 06/30/2004	CLASS PERIOD END: 07/16/2007
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Glancy Binkow & Goldberg LLP (Los Angeles) 1801 Ave. of the Stars, Suite 311, Los Angeles, CA, 90067 (voice) 310.201.915, (fax) 310. 201-916, info@glancylaw.com Kaplan Fox & Kilsheimer, LLP (former New York, NY) 805 Third Avenue, 22nd Floor, New York, NY, 10022 (voice) 212.687.1980, (fax) 212.687.7714, info@kaplanfox.com Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com Wolf Haldenstein Adler Freeman & Herz LLP (New York) 270 Madison Avenue, New York, NY, 10016 (voice) 212.545.4600, (fax) 212.686.0114, newyork@whafh.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 4

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Type: Complaint		Date on the document: 08/09/2007
Motion Of Pelo A.S. To Consolidate, To Be Appointed Lead Plaintiff, And For Approval Of Its Selection Of Lead Counsel And Liaison Counsel
Type: Motion		Date on the document: 10/09/2007
Order
Type: Order		Date on the document: 11/01/2007
Statement Pursuant To Fed. R. Civ. P. 23(E)(3)
Type: Other		Date on the document: 04/09/2008
Final Approval Order And Judgment
Type: Order		Date on the document: 07/11/2008
US District Court Civil Docket
Type: Docket		Date on the document: 08/05/2008
Order Authorizing Distribution Of Net Settlement Fund, Inclusion Of Late Claims, Payment Of Settlement Administration Expenses, And Donation Of Unclaimed Funds
Type: Order		Date on the document: 01/22/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 01/26/2010

OTHER DOCUMENTS
Class Action Complaint for Violation of the Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Isaac Fishman, Custodian For The IBF Foundation, et al. v. Qiao Xing Universal Telephone, Inc., et al.
Type: Complaint		Date on the document: 08/14/2007
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Reuvin Lapin, et al. v. Qiao Xing Universal Telephone, Inc., et al.
Type: Complaint		Date on the document: 09/05/2007

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