CASES
China Medicine Corporation
Class Period: Nov 30, 2006 to Mar 23, 2011
Lead Plaintiff Deadline: Sep 16, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against China Medicine Corporation ("China Medicine" or the "Company") on behalf of all who purchased or otherwise acquired China Medicine common stock between November 30, 2006 to March 23, 2011. This case has been filed in the USDC - California (Central).
The Complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. As a result of defendants' false statements, China Medicine stock traded at artificially inflated prices during the Class Period.
On February 22, 2011, China Medicine issued a press release announcing that Frazer, LLP, the Company's accountant, would be declining to stand for reappointment. On the news, the Company's stock lost more than 40% of its value from February 23, 2010 to March 23, 2011.
Then on March 23, 2011, China Medicine filed a Form 8-K with the Securities and Exchange Commission ("SEC") announcing that its board of directors (the "Board") had concluded that the Company's financial statements filed with the SEC for the 2008 and 2009 fiscal years and the quarterly reports during the fiscals years 2008, 2009 and 2010 were unreliable. China Medicine also disclosed that certain accounting and reporting errors were identified with respect to improper activities by certain employees at the Company's subsidiaries. The Company purportedly intends to restate the previously issued financial statements and has withdrawn its application for a NASDAQ listing. In reaction to the news, on the next trading day, China Medicine's stock drooped by over 53% from $1.16 per share on March 23, 2011 to $0.54 per share on March 24, 2011 on heavy volume.
On July 8, 2011, the Company announced that its earlier financial statements for the 2006 and 2007 fiscal years were also considered materially unreliable. In reaction, China Medicine's stock lost 10% closing at $0.72 per share down from $0.80 per share on July 8, 2011.
According to the complaint, the true facts, which were known by defendants but concealed from the investigating public during the Class Period, were as follows: (a) the company's employees were engaged in improper activities with respect to financial reporting; (b) the financial reports filed with the SEC and the related statements made to investors were materially inaccurate and unreliable; and (c) defendant Frazer failed to conduct its audits of the Company's financial statements according to standards promulgated by the Public Company Accounting Oversight Board or the Auditing Standards Board.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.