According to the law firm press release, certain CMGE officers and directors and underwriters, failed to disclose and/or materially misstated CMGE's true financial condition. Specifically, Defendants made false and misleading statements and/or failed to disclose that CMGE was engaged in a bribery scheme within the Company's game publishing business, that CMGE was engaged in undisclosed related party transactions, and that CMGE lacked internal controls.
The complaint alleges that on June 19, 2014 the price of CMGE shares fell $4.27/share to $14.63/share before being halted by the NASDAQ on news reports that CMGE had removed nine executives, including the Company's President in connection with the alleged bribery. Chinese internet news media reported that the misconduct also involved undisclosed related party transactions with CMGE. As a result of this adverse information, CMGE investors were damaged.
On November 20, 2014, the Court appointed lead plaintiff and approved lead counsel. Lead plaintiff filed a consolidated complaint on February 2, 2015.
On March 7, 2016, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to file an amended complaint.
A second consolidated and amended complaint was filed on July 18.
The parties filed a Stipulation of Settlement on May 22, 2017. The Settlement was preliminarily approved on May 25.