Hagens Berman Sobol Shapiro LLP, a nationwide, investor-rights law firm, is representing investors in a proposed class-action lawsuit against China MediaExpress (NASDAQ: CCME). The suit has been filed in the United States District Court for the Southern District of New York and alleges that the Company misrepresented its operations and financial state.
The firm was appointed lead counsel on June 7, 2011, on behalf of a proposed class of shareholders.
On March 14, 2011, CCME announced that its independent auditor, Deloitte Touche Tohmatsu (DTT), and its Chief Financial Officer Jacky Lam had resigned. According to CCME, the auditor stated that it was “no longer able to rely on the representations of management.” CCME announced that it will delay its fourth quarter earnings release.
China MediaExpress purports to own the largest television advertising network on buses throughout 18 of China’s regions, including Beijing. According to the complaint, The Company claims to sell advertisements on more than 27,000 buses. However, the complaint alleges that CCME made false and misleading statements, including misrepresentations about its revenues, the number of buses in its network and the nature of its business relationships.
On February 3, 2011, analyst firm Muddy Waters released a report alleging that CCME had exaggerated the scope of its operations as part of a “pump and dump” scheme to inflate revenues for management, who would sell the stock. The report claimed that CCME owns fewer than half of the buses it claims to own and that many of the buses screens do not play advertising content. China MediaExpress shares fell 33 percent on February 3, closing at $11.09 per share.
UPDATE:
June 7, 2011 - Hagens Berman has been appointed lead counsel for the plaintiffs by the court.
March 21, 2011 - Hagens Berman notifies CCME investors that the “Class Period” for the China MediaExpress lawsuit has expanded to May 14, 2010 to March 11, 2011 (the “Class Period”).