According to a press release dated December 03, 2010, the Complaint alleges violations of the Securities Exchange Act against China Education Alliance and certain of its officers and directors for misrepresenting the Company’s financial performance. The Complaint alleges that contrary to the Company’s annual reports filed with the SEC for fiscal 2008, which reported $24.9 million of revenue, an annual report for the Company’s main operating subsidiary filed with the Chinese authorities reported less than a million of revenue for 2008. This discrepancy, along with other accounting inconsistencies, and contradictions about the Company’s online education and training center operating segments, has raised red flags of fraud. When this adverse information was released to the market on November 29, 2010 the price of China Education Alliance stock fell substantially damaging investors.
On March 2, 1011, Judge Christina A. Snyder granted the motion to consolidate two related actions under Master Docket, case number No. CV 10-09239 CAS (JCx). According to the order, every pleading filed in this consolidated action shall bear the following caption: In re China Education Alliance, Inc. Securities Litigation. All Securities Class Actions subsequently filed in, or transferred to, this District shall be consolidated into this action. The Troxler Group is appointed Lead Plaintiff of the class. Movant's choice of counsel is approved, and accordingly, the Rosen Law Firm, P.A. is appointed Lead Counsel.
On May 2, 2011, the Lead Plaintiff filed a Consolidated Amended Complaint alleging violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5. The defendants filed a motion to dismiss the case on September 6, 2011, which was denied on October 11, 2011.
On December 5, 2011, the plaintiff filed a Consolidated Second Amended Complaint.
On April 5, 2012, the Court denied the motions to dismiss of certain individual defendants, but also granted without prejudice the motion to dismiss of another individual defendant. Plaintiffs were given leave to file an amended complaint.
On November 19, 2012, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice.
On March 11, 2013, the Court issued an Order awarding attorneys' fees and expenses. This was followed by a Final Judgment and order by the Court to dismiss this case with prejudice.