During 2011, plaintiffs filed a wave of securities class action lawsuits against U.S.-listed Chinese companies. There were 39 of these lawsuits filed in 2011 (out of 218 total securities class action lawsuit filings in 2011), as discussed here. Often the complaints in these lawsuits consisted of little more than a repetition of the allegations that had been raised against the company in an Internet analyst report.
While the Internet reports often raised sensational allegations against the companies, the claimants still faced the problems associated with trying to substantiate these allegations - a challenging task under any circumstances, but even more so given political, legal and cultural differences involved, as well as language and other barriers. It should come as no surprise then that a few of these cases might just peter out.
Although there is no way to know for sure from the bare record, that certainly seems to be the case in the securities class action lawsuit that had been filed in 2011 against Yongye International.
As discussed at greater length here, plaintiffs first filed a securities class action lawsuit against Yongye and certain of its directors and officer in the Southern District of New York in May 2011. The complaint relied on a May 11, 2011 Seeking Alpha article entitled "Yongye International's Reported Production: SEC Filings Raise Red Flags" (here). The article stated in part "that the company and its joint-venture partner could not have produced, and therefore sold, the reported plant product tonnages given the company's stated manufacturing capacity and shipments." Ultimately several class actions were filed, which were later consolidated and lead counsel was appointed. Lead counsel filed an amended complaint in December 2011. The amended complaint again was reliant on the allegations in the Seeking Alpha article.
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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.
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