According to the press release dated May 31, 2011, the Complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations and prospects. Specifically, (1) the Company improperly recognized revenue in incorrect financial reporting periods as its subsidiaries improperly recorded its sales and costs of sales; (2) the Company improperly engaged in several transactions without properly disclosing their related-party nature; (3) the Company lacked adequate internal and financial controls; and (4) as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On March 1, 2011, the Company disclosed that its previously issued financial statements for fiscal years 2008 and 2009, as well as its interim reports for those periods "should no longer be relied upon due to a cutoff error regarding timing of revenue in such periods." On March 25, 2011, the Company disclosed that it had "received a notification letter from the NASDAQ Stock Market indicating that the Company was not in compliance" with NASDAQ's continued listing requirements as it failed to timely file its annual report on a Form 10-K for the fiscal year ended December 31, 2010. On May 6, 2011, after the close of trading, NASDAQ halted the trading of Wonder Auto stock until the Company satisfied NASDAQ's request for "additional information." Trading has not been resumed.
On May 12, 2011, the Company disclosed in a press release, that its Audit Committee had "undertaken an internal investigation concerning certain investment and acquisition transactions." On May 20, 2011, the Company disclosed that the Audit Committee's investigation will continue until at least June 2011 and was commenced "in response to a report alleging that the Company had engaged in several transactions without properly disclosing their related-party nature."
On October 3, 2011, the Court issued an Order consolidating several cases under the current docket, appointing lead plaintiff, approving of lead counsel, and changing the title of the case to In re Wonder Auto Technologies, Inc. Securities Litigation.
On December 5, 2011, the Lead Plaintiff filed a Consolidated Complaint for violations of federal securities laws.
On January 9, 2013, the parties entered into a Stipulation and Agreement of Settlement. On January 15, the Court issued an Order preliminarily approving the settlement. On May 31, the court issued a Final Judgment approving the Settlement and ordered this case dismissed with prejudice.