Rigrodsky & Long, P.A. Files Securities Fraud Class Action Against Focus Media Holding Limited
Rigrodsky & Long, P.A. announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired the American Depository Receipts (“ADRs”) of Focus Media Holding Limited (“Focus Media” or the “Company”) (Nasdaq: FMCN) between September 25, 2007 and November 21, 2011, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 (the “Complaint”). The case is entitled Palny v. Focus Media Holding Limited, C.A. No. 11-CV-9051-CM (S.D.N.Y.). The Complaint names Focus Media and certain of its officers and directors as defendants.
If you wish to view a copy of the Complaint, discuss this action, or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Noah R. Wortman, Case Development Director of Rigrodsky & Long, P.A., 919 North Market Street, Suite 980 Wilmington, Delaware, 19801 at (888) 969-4242, by e-mail to firstname.lastname@example.org, or at: http://www.rigrodskylong.com/news/focus-media-holding.
Focus Media is a multi-platform digital media company and operates a liquid crystal display (LCD) network using audiovisual digital displays in China.
During the Class Period the Company reported that it had engaged in several acquisitions, including that of Framedia, Target Media, Focus Media Wireless, Allyes, CGEN and other smaller acquisitions. As alleged more fully in the Complaint, 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 of its 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. The Complaint alleges that defendants deliberately overpaid for these acquisitions, all but ensuring that Focus Media would incur costs, including those relating to intangibles or goodwill, in excess of its projected costs for these transactions.
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