According to the law firm press release, L&L, formerly known as L&L International Holdings, is a coal-mining company founded in 1995. L&L purports, through its subsidiaries, to engage in coal mining, clean coal washing, coal coking, and coal wholesaling businesses 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: (1) the Company improperly accounted substantial revenue from operations that were already shut down; (2) the Company claimed acquisitions and divestitures of various properties through swap transactions that never occurred through the exchange of assets it never owned in the first place; (3) the Company lacked adequate internal and financial controls; and (4) that, as a result of the foregoing, the Company's financial results were materially false and misleading at all relevant times.
On September 19, 2013, GeoInvesting published an article on Seeking Alpha disclosing that the Company has been "defrauding investors by booking substantial revenue from operations that have been idled for quite some time." Specifically, GeoInvesting stated that the Company's numerous acquisitions and divestitures through the years have amounted "to a bait and switch shell game" by utilizing "swap transactions that never occurred." Moreover, the article concluded "that revenue of $77.6 million disclosed in LLEN's 2013 10K, generated from its Hong Xing coal washing factory, was actually close to zero, if it is not actually zero" as the factory "has been shut down since 2012."
On this news, the Company's stock plummeted $0.80 per share or more than 38%, to close at $1.27 on September 19, 2013.
On December 23, 2013, the Court issued an Order appointing lead plaintiff and approving lead counsel.
On December 15, 2014, the parties entered into a Stipulation of Settlement. On February 13, 2015, the Court preliminarily approved the Settlement. On August 3, the Court granted final approval of the Settlement and dismissed this case with prejudice.