Giant Interactive Group, Inc. develops and operates online games in the People's Republic of China. The Company’s primary game is ZT Online which is a free-to-play massive multi-player online game.

The original class action was commenced on behalf of purchasers of Giant Interactive's American Depositary Shares pursuant and/or traceable to the Company’s initial public offering on or about November 1, 2007 through November 19, 2007. The Complaint charges Giant Interactive and certain of its officers and directors with violations of the Securities Act of 1933.

According to the Complaint, on or about October 31, 2007, Giant Interactive filed with the Securities and Exchange Commission a Form F-1/A Registration Statement for the IPO. On or about November 1, 2007, the Prospectus with respect to the IPO, which forms part of the Registration Statement, became effective and, including the exercise of the over-allotment, more than 57 million shares of Giant Interactive’s ADSs at $15.50 per ADS were sold to the public, thereby raising more than $886 million. The Complaint alleges that the Registration Statement and the Prospectus failed to disclose that the Company had experienced a decline in average concurrent users (“ACU”) and peak concurrent users (“PCU”) for the third quarter of 2007 due to a significant rule change for ZT Online.

On November 19, 2007, after the close of the market, Giant Interactive issued a press release announcing its financial results for the third quarter of 2007, the period ending September 30, 2007. Among other things, the Company reported that ACU for the third quarter was 481,000, a decrease of 6% from the second quarter of 2007 and that PCU for the third quarter was 888,000, a decrease of 17.2% from the second quarter of 2007. Then, on November 20, 2007, before the market opened, Giant Interactive held a conference call with analysts and investors to review the Company’s earnings release. During the conference call, Giant Interactive attributed the decline in the third quarter ACU and PCU figures to a rule change to ZT Online that was implemented to discourage gold farming activity. Following the Company’s earnings release and conference call, on November 20, 2007, the price of Giant Interactive ADSs dropped from $14.88 per ADS to $11.10 per ADS on extremely heavy trading volume.

As summarized by the Company’s FORM 20-F for the fiscal year ended December 31, 2008, on November 26 and December 20, 2007, Pyramid Holdings, Inc. and Rosie L. Brooks, respectively, filed a class action against the Compny in the United States District Court, Southern District of New York, for alleged violations of federal securities laws with the initial public offering. On July 30, 2008, the Court consolidated these actions into one class action and appointed a group of individual shareholders made up of Dunping Qui, Xie Yong, Linming Shi, and Arthur Michael Gray (the “Qui Group”) and their Counsel as lead Plaintiffs and lead Plaintiffs’ Counsel, respectively, under the Private Securities Litigation Reform Act. On October 6, 2008, the Qui Group filed a consolidated amended Complaint asserting claims for violations of Sections 11 and 12(a)(2) of the Securities Act of 1933. The Complaint alleges that Plaintiffs purchased American Depositary Shares issued pursuant to or traceable to the initial public offering and that the registration statement and prospectus for that offering contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the applicable rules and regulations. Specifically, the Complaint alleges that prior to the initial public offering, Giant Interactive implemented a rule change to discourage “gold farming activities” in ZT Online. Gold farming occurs when companies hire individuals to play the game to generate online currency that is sold on third party websites for cash. According to the Complaint, this rule change caused a decline in ACU and PCU and that the registration statement and prospectus in connection with the initial public offering failed adequately to disclose these declines. The Complaint seeks a declaration that the action is a proper class action; damages to class members with interest; that the initial public offering be rescinded; litigation costs and expenses, including attorneys’ fees, accountants’ fees, and experts’ fees.

Defendants filed a motion to dismiss the Complaint for failure to state a claim on November 21, 2008. On August 7, 2009, the Court denied Defendants' Motion to Dismiss.

The parties entered into a Settlement Agreement on July 21, 2011. On August 3, the Court granted preliminary approval of the Settlement. On November 2, the Court approved an award of Attorneys' Fees and Expenses and on November 3, the Court granted final approval of the Settlement and entered Final Judgment.