According to the law firm press release, the lawsuit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as common law fraudulent concealment, that occurred when CHOP, its directors, and/or officers issued materially false and misleading statements regarding CHOP’s business and prospects.
Specifically, on September 4, 2014, CHOP disclosed that, before June 30, 2014, it had purportedly spent $234 million of its unrestricted cash to acquire a collection of antique Chinese porcelain that it valued at $905 million. However, CHOP provided no details regarding the collection’s source, where the collection was being stored, whether it is insured, and who appraised and authenticated it.
Before this unexpected purchase, CHOP had emphasized its fiscal discipline, and had characterized its growth strategy as involving expanding its product lines, expanding overseas, and combining with competitors. CHOP had also previously touted its significant cash reserves, reporting holdings of $230.7 million of unrestricted cash as of March 31, 2014. By contrast, on September 4, 2014, CHOP disclosed that as of June 30, 2014, it had a mere $3 million in unrestricted cash.
Upon the announcement of this alleged acquisition, shares of CHOP declined from $0.61 per share on September 3, 2014 to a September 4, 2014 closing price of $0.49 per share, representing a decline of approximately 20%.
On April 29, 2015, the Court issued an Order appointing lead plaintiff and approving lead counsel.
An amended complaint was filed on January 22, 2016.
On May 16, 2016, the Court issued an Order granting Defendant's motion to dismiss without prejudice. Plaintiffs were given leave to file an amended complaint.