Mcglaughlin First Responded To Intensive Class Action &Nbsp, Saying It Would Not Affect Operation.

Sarraf Gentile, an American law firm, announced on Monday that the company had been in the District Court of southern New York.

In response to these lawsuits, Mcglaughlin responded yesterday morning that there was no basis for litigation claims, and that all proceedings would not have a major impact on Mcglaughlin's day-to-day operation.

This is the first time that Mcglaughlin has made a statement about this.

Mcglaughlin says it does not affect business

Last weekend, Mcglaughlin encountered investor class action two times, accusing the information disclosed in his IPO was wrong, contrary to the listing application documents, Mcglaughlin's gross margin has been negatively affected by the rise in costs and expenses, making its performance impossible to reach IPO's expectations.

In November 29th, after disclosing the third quarter earnings, Mcglaughlin's share price fell by nearly 60% within two days.

In yesterday's response to the lawsuit, Mcglaughlin said that Mcglaughlin and any senior management and directors were not sent to any copy of the claim, and the company was prepared to make a strong defense against the claim.

In Mcglaughlin's view, there is no basis for litigation claims, and all litigation will not cause Mcglaughlin's daily operation.

Alleged false statement

The lawsuit against Mcglaughlin by Sarraf Gentile, an American law firm, is the third class action lawsuit that Mcglaughlin has encountered.

The law firm represents all investors who bought the company's common stock when Mcglaughlin first made public offerings in October 2010. He sued Mcglaughlin and some executives and directors of the company, accusing them of violating the relevant provisions of the Securities Act of 1993 of the United States, and made significant false and misleading statements in the issue of IPO.

The lawsuit pointed out that contrary to the registration statement submitted by Mcglaughlin to the securities and Exchange Commission, the gross profit of the company has been affected by the rise in costs and expenditures, and thus fails to achieve its expected performance goals.

When this fact was disclosed in the three quarterly bulletin issued by the company in November 29th, it led to a sharp fall in share price and thus brought losses to investors.

Last weekend, the US law firm Kahn Swick &Foti and Rosen law firm used similar reasons for Mcglaughlin's class action lawsuit.

Mcglaughlin's market value shrank by 60%

Mcglaughlin was listed on NASDAQ in October 26th, wearing the aura of "China B2C first share". The P / E ratio reached 150 times, and the closing price on the first day of the listing reached US $17.26, 57.36% higher than the issue price, and the total market value reached US $1 billion.

After a "good start", Mcglaughlin's stock price began to continue to oscillate downward, and in November 29th, the three quarterly bulletin announced that share price plummeted 39.9%, closed at $8.15, breaking its $11 issue price.

After the outbreak of class action, Mcglaughlin

Analysis

"Class action is very common in the United States".

Financial law experts believe that such cases are mostly settled in the form of reconciliation.

Yesterday, Mcglaughlin encountered a class action lawsuit, Peking University law school, a professor of financial law, told reporters that in the United States this kind of class action against listed companies is very common, such cases are often settled in the form of reconciliation.

The professor said that because of the high cost and the difficulty of obtaining evidence, in the United States, such class action cases are often initiated by law firms. Once the lawsuit is successful, the company can get 20%-30% of the compensation as a commission.

Before 1995, there were a lot of such cases in the United States every year. Many law firms often initiated lawsuits without real evidence, which brought great trouble to the normal operation of listed companies.

In order to prevent such "excessive litigation", in 1995, the United States reforms the procedural law, restraining the lawsuits which lack legal basis, stipulates that only those representative plaintiffs can sue the listed companies, and stipulates that the court should decide the commission that the law firms deserve.

According to the professor, three law firms are currently suing Mcglaughlin and trying to win the support of most investors in order to compete for the "representative plaintiff" quota.

The professor told reporters that because the plaintiff represented all investors in the class action, the amount of compensation would often amount to hundreds of millions of dollars, and individual cases should be investigated for criminal responsibility if they were suspected of fraud. However, 90% of such cases will be settled in the form of reconciliation and compensation for Jin Dayue in the hundreds of thousands of dollars.

Because of the rigorous and complex laws and regulations of the United States, he suggested that Chinese enterprises listed in the US should hire specialized American lawyers to strictly control information disclosure and strictly abide by the market rules of the United States.

(Shen Weiqing)

"If there are very few people in China,"

Analysts believe that the causes of litigation are related to the characteristics of the US capital market.

For Mcglaughlin's case of class action, I American website analysts believe that the causes of litigation are related to the characteristics of the US capital market: first, the threshold is not high, and the listing is easy; two, it is not easy to mix up after the listing, and the listed companies are surrounded by a multi-faceted regulatory system.

In this regulatory system, the SFC is only responsible for monitoring information disclosure.

Other regulation is done by law firms, accounting firms, investment institutions, individual investors, media and other market forces. This is a system of social supervision or supervision by the whole people.

In the United States, the listing is called "go public", which means you should better open the company's management and accept the supervision of the public, otherwise you will pay a heavy price.

I, a US website analyst, said that if the Mcglaughlin incident happened in China, what might happen next is that few investors are concerned, because most of them do not know what their investment companies are doing; a few investors are concerned about the reports, then they will sue to the court, but they will not accept them; if the situation is so big, the SFC will punish Mcglaughlin for tens of thousands of dollars in the pressure of public opinion.