According to a press release dated October 26, 2011, the complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5.
The Complaint charges that the Company and certain of its officers and directors violated federal securities laws. Specifically, the Complaint alleges that defendants failed to disclose the following: (i) the Company improperly accounted for its convertible notes issued on February 15, 2008; (ii) that, as a result, the Company's financial results were incorrectly stated; (iii) that the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles; and (iv) China Automotive lacked adequate internal and financial controls.
On March 17, 2011, the Company's audit committee stated it would delay the annual financial statement and would need to restate all previously issued financial statements for the fiscal year 2009 and the first three quarters of 2010. On this news, shares of China Automotive fell to a closing price of $8.81 per share. On March 18, 2011, the Company announced that it received a letter from NASDAQ stating it was no longer in compliance with NASDAQ Marketplace rules.
On February 2, 2012, the Court issued an Order appointing Lead Plaintiffs and Lead Counsel.
On February 24, 2012, Plaintiffs filed an amended Complaint.
On August 8, 2012, the Court issued an Order ruling on Defendants' motions to dismiss. The Motion to Dismiss of the Company was denied, and the Motion of the Company's Auditor was granted. Plaintiffs were given leave to file an amended Complaint. On August 20, 2012, Plaintiffs filed their second amended Complaint.
On August 27, 2012, the Court issued an Order appointing Co-Lead Counsel.
On September 25, 2012, the Court issued an Order denying Auditor Defendant's Motion to Dismiss.
On January 22, 2013, a Stipulation was filed voluntarily dismissing certain individual Defendants from this action without prejudice.
On July 3, 2013, an Order and Opinion was rendered by the Court denying the plaintiff’s motion for Class Certification as the Court felt the Plaintiffs’ Class lacked adequacy, typicality, and predominance.
On December 6, 2013, Plaintiffs entered into a Stipulation of Settlement with the Auditor Defendant. On January 15, 2014, the Court denied the Motion to approve this Settlement. On April 29, 2014, Lead Plaintiffs voluntarily dismissed the claims against the Company and two of the individual Defendants. On July 28, Lead Plaintiffs voluntarily dismissed the claims against the Auditor Defendant.