According to the law firm press release, DNTW Chartered Accountants, LLP ("DNTW") is an auditing firm, headquartered in Markham Ontario Canada, with offices throughout Canada. During the Class Period, DNTW audited Subaye Inc.'s annual reports filed on Forms 10-K with the SEC. Subaye allegedly offers video sharing services in China.

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, Defendants made false and/or misleading statements and/or failed to disclose that: On December 12, 2010, Subaye filed its Form 10-K with the SEC for the fiscal year ended September 30, 2010. Included in the 10-K was DNTW's materially false and misleading clean audit report on Subaye's 2010 and 2009 financial statements. DNTW's audit reports were false when made because DNTW's audits of Subaye were not conducted "in accordance with the standards of the Public Company Accounting Oversight Board (United States)." Had DNTW conducted its audits in accordance with the PCAOB Rules (i.e. Generally Accepted Auditing Standards), DNTW could not have issued the clean audit reports it did, and would have discovered that Subaye's business was a fiction.

DNTW was aware that Subaye's business model continued to change, yet the business continued to purportedly grow revenue. For example, in 2010 Subaye claimed to have over 1,400 sales and marketing employees, and its purported revenues were $39 million, while it projected more than $71 million for 2011—a year in which it was planning to discontinue one business and shift into another; and DNTW was aware that Subaye had expensed $22 million—more than half of Subaye's revenues for 2010—as "marketing expenses."

DNTW also had access to, but turned a blind eye or recklessly disregarded the following: Subaye's headquarters was located in a building on the campus of a university, among student offices. The headquarters was essentially an empty office with no IT infrastructure; Subaye's customer list database was a fiction as nearly all of the listed customers were not paying customers or could not be verified; and Subaye has undisclosed material related party transactions in 2009 and 2010 that raised serious questions about the legitimacy of the Company's sales.

On January 19, 2011 the Public Company Accounting Oversight Board ("PCAOB") filed a settled action against Subaye's CFO and his audit firm in connection with his and his firm's unwillingness to cooperate with the PCAOB and for failure to make required filings with the PCAOB. The Order also forbid Subaye's CFO from serving as CFO of a public company—yet he continued as Subaye's CFO in violation of the PCAOB order.

On February 22, 2011 Subaye issued a press release announcing an update on the status of its quarterly filing. The announcement provided further details and reasons for the delayed 10-Q filing and false reassurances to investors. On this news, Subaye's shares declined $1.00 per share or 12% to close at $7.20 per share on February 22, 2011. On March 14, 2011 the Company announced that Defendant had resigned as the Company's CFO. On this news, the Company's stock fell $1.56 per share or 26% to close at $4.36 on March 15, 2011.

On March 22, 2016, the Court issued an Order granting Defendants' motion to dismiss and closing this case. Lead Plaintiff filed a notice appealing the District Court's Dismissal Order on April 13. On January 11, 2017, the Court of Appeals affirmed the judgment of the District Court.