According to a press release dated May 23, 2011, the lawsuit charges violations against Longtop Financial and its officers and directors for issuing materially false and misleading financial statements to the investing public between June 29, 2009 and April 25, 2011, inclusive (the "Class Period").
The Complaint asserts violations of the federal securities laws against Longtop and its officers and directors for misrepresenting the true financial condition of the Company and failing to disclose material related party transactions during the Class Period. Beginning on April 26, 2011 a series of reports issued by Citron Research and others exposed potential accounting fraud and nondisclosure of related party transactions at Longtop.
On May 17, 2011 a trading halt was instituted on Longtop's common stock. On May 23, 2011 Longtop issued a press release announcing, among other things, (1) the resignation of its auditor, Deloitte Touche Tohmatsu CPA Ltd. ("DTT"); (2) the resignation of Longtop's Chief Financial Officers; (3) the initiation of an SEC inquiry; (4) and the initiation of an independent investigation. According to the announcement, DTT was resigning because of "(1) the recently identified falsity of the Company's financial records in relation to cash at bank and loan balances (and possibly in sales revenue); (2) the deliberate interference by certain members of Longtop management in DTT's audit process; and (3) the unlawful detention of DTT's audit files."
DTT also stated that it "was no longer able to rely on management's representations in relation to prior period financial reports, that continued reliance should not longer be placed on DTT's audit reports on the previous financial statements, and DTT declined to be associated with any of the Company's financial communications in 2010 and 2011.
A similar, purported class action complaint has also been filed in the U.S. District Court for the Southern District of New York.
On September 20, 2011, the Plaintiff filed a Notice of Voluntary Dismissal and the case was electronically closed on the same day.
On September 21, 2011, an Order Consolidating Related Actions, Appointing Lead Plaintiff and Approving Lead Plaintiff's Selection of Lead Counsel and Liaison Counsel was issued in the Southern District of New York under docket number 11-cv-03658.
On November 18, 2011, a Consolidated Class Action Complaint was filed by the lead plaintiffs against the defendants.
On February 29, 2012, a Notice of Voluntary Dismissal without Prejudice of Defendants Thomas Gurnee and Deloitte Touche Tohmatsu Limited was filed with the Court.
On June 28, 2012, an order was issued by the Court denying one of the individual defendant’s motion to dismiss.
On November 14, 2012, an Order was issued by the Court dismissing the Deloitte Touche Tohmatsu Limited, but granting the plaintiff leave to replead within thirty days.
On December 14, 2012, the lead plaintiffs filed an Amended Consolidated Class Action Complaint against the defendants.
On April 8, 2013, the Court issued an Opinion and Order granting the defendant DTTC's motion to dismiss.
On June 21, 2013 a motion for class certification was filed.
On November 14, 2013, the Court entered a Default Judgment in the amount of $882,300,000 against certain Defendants.
On November 21, 2014, after a brief jury trial, a verdict was reached against remaining individual defendant.