Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Longtop Financial Technologies Ltd. (“Longtop” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Class action lawsuits have been filed in the U.S. District Courts for the Central District of California and the Southern District of New York by other law firms on behalf of purchasers of the common stock and/or the American Depository Shares of Longtop Financial Technologies Ltd. (NYSE:LFT) between October 25, 2007 and April 25, 2011, inclusive (the “Class Period”).
Longtop Financial Technologies Ltd. claims it is a leading software development and solutions provider targeting the financial services industry in China. According to the Company, it is “the highest ranked Chinese financial technology provider on the Global FinTech 100 survey of top technology partners to the financial services industry.”
The complaints allege that Longtop and certain of its officers and/or directors (“Defendants”) misrepresented and/or failed to disclose that: (1) the Company’s financial records regarding cash, loan balances, and sales revenue were falsified; (2) the Company's margins were vastly overstated; (3) Longtop’s largest customer was an undisclosed related party; (4) the Company’s management interfered with the audit process and improperly detained audit files of the Company's auditor, Deloitte Touche Tohmatsu CPA Ltd. ("Deloitte"); (5) Longtop's financial statements were not presented in accordance with GAAP, and (6) Defendants had no reasonable basis for their positive statement about Longtop's business and financial results.
Trading in the Company’s shares was halted on May 17, 2011. On May 23, 2011, Longtop issued a press release announcing that its Chief Financial Officer resigned, that its outside auditor Deloitte had resigned, that the Securities and Exchange Commission had begun an inquiry into the Company, and that the Company had retained a forensic accountant to begin an independent investigation. In its resignation letter, Deloitte stated that it had resigned due to management’s interference with its audit, the “unlawful detention” of its audit files, and “falsity” in Longtop’s financial records.