Overseas Listing Was Again "Acclimatized" To Mcglaughlin'S Lawsuit.

China's B2C is not good at the first time. In 2010, "news" kept on reaching Mcglaughlin's biggest challenge this year at the end of the year.

Three lawsuits in one week were successfully listed in the United States and became China.

Encountering class action

According to overseas sources, Mcglaughlin was lawfully charged for a week in early December.

December 7th, Law Corporation

Prior to that, in December 4th, KahnSwick&Foti and Rosen's law firm also announced a class action lawsuit against Mcglaughlin.

Both sides of the prosecution stated that Mcglaughlin's specific executives, directors and others involved in issuing prospectus and listing applications were involved in issuing false information, including or allowing major errors or misleading statements, thereby violating the Securities Act of 1933.

KSF pointed out in the lawsuit that

Meanwhile, Rosen law firm in the United States also said in a lawsuit that Mcglaughlin's specific executives, directors and others violated the provisions of the eleventh and fifteenth chapters of the Securities Act of 1993, and issued some false information in the IPO document.

Contrary to the listing documents submitted by Mcglaughlin, the increase in cost and expenses of Mcglaughlin has had a negative effect on its gross profit, making Mcglaughlin unable to achieve the expected goal of IPO.

When Mcglaughlin disclosed the truth in November 29, 2010, the company's share price fell sharply, causing investors to suffer losses.

General rule?

In the wake of a series of negative rumors and realities in recent days, Mcglaughlin made great efforts to give clarification. In a statement to this newspaper, Mcglaughlin said that the prosecution that had been encountered would not have a major impact on the daily operation of the company, Mcglaughlin said.

The seriousness of the case (class action) is obviously overstated.

Mcglaughlin said that so far, it has been informed that some individual shareholders in the United States submitted at least one request for class action in December 2010, claiming that the company and its senior management and directors violated the US Securities Act 1933 in the company's initial public offering in October 2010.

But Mcglaughlin and any senior management and directors have not been sent to any copy of the claim at present.

In Mcglaughlin's view, the current litigation does not have any significant impact on the company's day-to-day operations, because these claims are unfounded.

In fact, Mcglaughlin believes that Chinese companies listed in the US are subject to class action.

A Mcglaughlin partner told our reporter that Mcglaughlin was not the first company to be subjected to class action. In the US capital market, class action should be relatively normal. 8% of Chinese enterprises have encountered similar situations in the US market, such as NetEase, Focus Media, Sina and so on.

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"This is just the habit of the American market."

Some analysts agreed that "by the end of 2009, 25 of the 284 Chinese Listed Companies in the United States had experienced class action lawsuits. Most of them were prosecuted for false or misleading information, which led to a fall in share prices and a loss to investors.

So Mcglaughlin is just another unfortunate Chinese company. "

According to the analyst, "legal prosecution is very normal in the US market, and the procedure is simple. Moreover, in another way, Chinese enterprises are listed most overseas in recent years, so it is not surprising that Chinese enterprises are subject to collective prosecution.

At the same time, because in the class action, the lawyer can get the lawyer's fee about 20%-30% of the compensation amount, the American lawyer is also very active in the class action.

Therefore, there is a view that a lot of class actions are lawyers' litigation for obtaining high attorney fees, which has led to the abuse of class action system.

For now, the "intensive" lawsuit will undoubtedly be a major test for the development of enterprises for Mcglaughlin. However, from past cases, this is another manifestation of another Chinese enterprise's "acclimatization" in the US capital market, which is a rare international learning process.

"There is no need to worry too much about it. So far, many overseas lawsuits against Chinese enterprises have not produced any threat to the survival of enterprises," he said.

Some analysts said.