Case Page

 

Case Status:    SETTLED
On or around 08/15/2014 (Date of order of final judgment)

Filing Date: October 17, 2011

According to a press release dated October 17, 2011, he complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934.

The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that the Company was materially overstating its net income by understating the costs associated with the Company’s scorecard system; (b) that the Company failed to account for incentives provided to the Company’s agents as costs since those incentives were reasonably likely to be tendered at a future date; and (c) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.

On December 2, 2010, an analyst report claiming that the Company may have understated commission expenses and overstated net income as a result of the way the Company incentivizes its agents, which the report said is “no different from an equity-based compensation plan.” In reaction to the report, the price of the Company’s ADSs fell $5.36 per ADS over the next two trading days, or 24%, to close at $16.79 per ADS, on December 3, 2010.

On March 1, 2011, the Company issued a press release announcing its financial results for the fourth quarter and year end of 2010, the period ended December 31, 2010. For the quarter, the Company reported total net revenues of RMB449.0 million (US$68.0 million), net income attributable to the Company’s shareholders of RMB126.5 million (US$19.2 million) and basic and diluted net income per ADS of RMB2.514 (US$0.381) and RMB2.447 (US$0.371), respectively. Moreover, the Company reported an increase in total operating costs and expenses of 29.0% and an increase in share-based compensation expenses of 298.9% for the same quarter in 2009. In reaction to the increases in total operating costs and expenses and share-based compensation expenses, the price of the Company’s ADSs fell $1.96 per ADS, or 11%, to close at $15.92 per ADS, on March 2, 2011.

On May 16, 2011, the Company issued a press release announcing that it received a preliminary non-binding proposal letter from a company controlled by certain a certian individual Defendant and Companies affiliated with him, to acquire all of the outstanding shares of the Company for $19.00 per ADS. In response to this announcement, the price of the ADSs rose $4.16 per ADS, or 32%, to close at $17.32 per ADS.

Then, on September 15, 2011, the Company issued a press release announcing that the Special Committee of its Board of Directors received a notice from the individual companies affiliated with him that “they have unanimously determined to withdraw the non-binding going private proposal dated May 14, 2011.”

In reaction the announcement of the withdrawal of the going private proposal, the price of the Company’s ADSs fell $1.64 per ADS, or 15%, to close at $9.03 per ADS. The price of the Company’s ADSs continued to fall during the next two trading days as the market continued to digest the Company’s announcement, closing at $7.31 per ADS on September 19, 2011.

On June 26, 2012, the Court issued an Order appointing lead plaintiffs and lead counsel.

On August 13, 2012, the plaintiffs filed their amended class action complaint.

On June 24, 2013, the Court denied the defendant's motion to dismiss the lead plaintiff's amended complaint.

On March 19, 2014, the parties entered into a Settlement Agreement. This Settlement was preliminarily approved by the Court on April 7th. On August 15, the Court granted final approval of the Settlement and dismissed this case with prejudice.

COMPANY INFORMATION:

Sector: Financial
Industry: Insurance (Miscellaneous)
Headquarters: China

SECURITIES INFORMATION:

Ticker Symbol: CISG
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 11-CV-07320
JUDGE: Hon.Victor Marrero
DATE FILED: 10/17/2011
CLASS PERIOD START: 03/02/2010
CLASS PERIOD END: 09/14/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Dyer & Berens LLP
    303 East 17th Avenue, Suite 300, Dyer & Berens LLP, CO 80203
    303.861.1764 303.861.1764 ·
  2. Holzer Holzer & Fistel, LLC (Atlanta)
    200 Ashford Center North, Suite 300, Holzer Holzer & Fistel, LLC (Atlanta), GA 30338
    770.392.0090 770.392.0090 ·
  3. Robbins Geller Rudman & Dowd LLP (Melville)
    58 South Service Road, Suite 200, Robbins Geller Rudman & Dowd LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 11-CV-07320
JUDGE: Hon.Victor Marrero
DATE FILED: 08/13/2012
CLASS PERIOD START: 03/02/2010
CLASS PERIOD END: 11/21/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Dyer & Berens LLP
    303 East 17th Avenue, Suite 300, Dyer & Berens LLP, CO 80203
    303.861.1764 303.861.1764 ·
  2. Holzer Holzer & Fistel, LLC (Atlanta)
    200 Ashford Center North, Suite 300, Holzer Holzer & Fistel, LLC (Atlanta), GA 30338
    770.392.0090 770.392.0090 ·
  3. Robbins Geller Rudman & Dowd LLP (Melville)
    58 South Service Road, Suite 200, Robbins Geller Rudman & Dowd LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
No Document Title Filing Date