CASES
Focus Media Holding Limited
Class Period: Sep 25, 2007 to Nov 21, 2011
Lead Plaintiff Deadline: Feb 10, 2012 + Deadline passed
Summary of Case:
A securities class action has been filed against Focus Media Holding Limited ("Focus Media" or the "Company") on behalf of purchasers (the "Class") of the American Depository Receipts ("ADRs") of Focus Media, who purchased or otherwise acquired the Company's ADRs between September 25, 2007 through November 21, 2011, inclusive (the "Class Period". This case has been filed in the USDC - SOUTHERN DISTRICT OF*NEW YORK).
The Complaint alleges that On September 25, 2007, Focus Media filed its annual report for the period ending December 31, 2006 with the SEC on Form 20-F (the "2006 Form 20-F"). In that 2006 Form 20-F, the Company reported that it had engaged in several acquisitions, including that of Framedia, Target Media, Focus Media Wireless, and Allyes. The 2006 Form 20-F stated that these acquisitions "form part of. . . [the Company's] strategy to further expand . . . [its] business. "The Company further represented in its 2006 Form 20-F that "[i]f we are presented with appropriate opportunities, we may acquire additional businesses, services or products that are complementary to our core business." The 2006 Form 20-F further stated: In addition, we cannot assure you that we will be able to realize the benefits we anticipate from acquiring Framedia, Target Media, Focus Media Wireless, Allyes and other companies, or that we will not incur costs, including those relating to intangibles or goodwill, in excess of our projected costs for these transactions.
The occurrence of any of these events could have a material and adverse effect on our ability to manage our business, our financial condition and our results of operations.
Defendants knew, or recklessly disregarded, that the foregoing statements concerning the reasons for the acquisitions of Allyes and the other companies acquired by Focus Media in 2007 were materially false and misleading. As alleged more fully below, in a research report dated November 21, 2011 (the "Research Report"), Muddy Waters, LLC ("Muddy Waters") reported that that Focus Media deliberately overpaid for these acquisitions, writing down $1.1 billion out of $1.6 billion in acquisitions since 2005 (such write-downs being equivalent to one-third of the Company's present enterprise value). Muddy Waters disclosed that by November 2011, Focus Media had written at least 21 ofits acquisitions down to zero and then given them away for no consideration. Muddy Waters reported that many of these write downs were not justified, and it was possible that the Company gave these acquisitions away to conceal losses from its outside auditors. In addition, Muddy Waters disclosed that certain Focus Media insiders, including Defendant Jiang, had used the Company as their counterparty in trading in and out of Allyes, earning a total of at least $70.1 million, while the Company's shareholders ultimately lost $159.6 million.
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.