Case Page

 

Case Status:    SETTLED
On or around 05/14/2014 (Date of stipulation and/or agreement of settlement)

Filing Date: December 12, 2011

According to a press release dated December 14, 2011, during the Class Period the Company reported that it had engaged in several acquisitions. As alleged more fully in the Complaint, in a research report dated November 21, 2011, reported that that the Company deliberately overpaid for these acquisitions, writing down $1.1 billion out of $1.6 billion in acquisitions since 2005 (such write-downs being equivalent to one-third of the Company’s present enterprise value). The report disclosed that by November 2011, the Company had written at least 21 of its acquisitions down to zero and then given them away for no consideration. Further, the report stated that many of these write-downs were not justified, and it was possible that the Company gave these acquisitions away to conceal losses from its outside auditors. In addition, the report disclosed that certain insiders had used the Company as their counterparty in trading in and out of one of the acquired companies, earning a total of at least $70.1 million, while the Company’s shareholders ultimately lost $159.6 million. The Complaint alleges that defendants deliberately overpaid for these acquisitions, all but ensuring that the Company would incur costs, including those relating to intangibles or goodwill, in excess of its projected costs for these transactions.

In addition, the Complaint alleges that defendants materially overstated that the majority of displays on the Company’s LCD display network were placed in “heavy-traffic areas of commercial office buildings,” when, in fact, only approximately 30% of the displays are in commercial buildings. According to the Research Report, “In Tier I cities, only approximately 45% of [the Company’s] screens are in office buildings. In Tier II cities, only approximately 30% of screens are in office buildings. The balance of screens is substantially all in residential buildings. Residential buildings are inherently less valuable to advertisers than are office buildings.”

Following the issuance of the Research Report, the price of the Company’s ADRs dropped precipitously from a close of $25.50 per ADR on November 18, 2011 (the last full trading day prior to the issuance of the Research Report), to a close of $15.43 per ADR on November 21, 2011, the day that the Research Report was issued, a drop of approximately 40%.

On March 30, 2012, a Decision and Order Appointing Lead Plaintiff and Approving Selection of Lead Counsel was issued by the Court.

COMPANY INFORMATION:

Sector: Services
Industry: Advertising
Headquarters: China

SECURITIES INFORMATION:

Ticker Symbol: FMCN
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-09051
JUDGE: Hon.Colleen McMahon
DATE FILED: 12/12/2011
CLASS PERIOD START: 09/25/2007
CLASS PERIOD END: 11/21/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Rigrodsky & Long, P.A. (Garden City)
    585 Stewart Avenue, Suite 304, Rigrodsky & Long, P.A. (Garden City), NY 11530
    (516) 683-3516 ·
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 11-CV-09051
JUDGE: Hon.Colleen McMahon
DATE FILED: 03/12/2014
CLASS PERIOD START: 09/25/2007
CLASS PERIOD END: 11/21/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Rigrodsky & Long, P.A. (Garden City)
    585 Stewart Avenue, Suite 304, Rigrodsky & Long, P.A. (Garden City), NY 11530
    (516) 683-3516 ·
No Document Title Filing Date