Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) ( http://www.rgrdlaw.com/cases/cninsure/) today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of CNinsure Inc. (“CNinsure”) (NasdaqGS: CISG) American Depositary Shares (“ADSs”) during the period between March 2, 2010 and September 14, 2011 (the “Class Period”).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/cninsure/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges CNinsure and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CNinsure, together with its subsidiaries, provides insurance brokerage and agency services, and insurance claims adjusting services in the People’s Republic of China.

The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that the Company was materially overstating its net income by understating the costs associated with the Company’s scorecard system; (b) that the Company failed to account for incentives provided to the Company’s agents as costs since those incentives were reasonably likely to be tendered at a future date; and (c) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.

On December 2, 2010, OLP Global LLC (“OLP Global”) issued an analyst report, which claimed that the Company may have understated commission expenses and overstated net income as a result of the way the Company incentivizes its agents. The OLP Global report alleged that the Company’s incentive program was “no different from an equity-based compensation plan.”

In reaction to the OLP Global report, the price of the Company’s ADSs fell $5.36 per ADS over the next two trading days, or 24%, to close at $16.79 per ADS, on December 3, 2010.

On March 1, 2011, CNinsure announced its financial results for the fourth quarter and year end of 2010, the period ended December 31, 2010. The Company reported an increase in total operating costs and expenses of 29.0% and an increase in share-based compensation expenses of 298.9% for the same quarter in 2009.

In reaction to the increases in total operating costs and expenses and share-based compensation expenses, the price of CNinsure ADSs fell $1.96 per ADS, or 11%, to close at $15.92 per ADS, on March 2, 2011.

On May 16, 2011, the Company announced that it received a preliminary non-binding proposal letter from a company controlled by defendant Yinan Hu (“Hu”), a co-founder of CNinsure and its Chairman and Chief Executive Officer, and entities affiliated with him to acquire all of the outstanding shares of the Company for $19.00 per ADS. In response to this announcement, the price of CNinsure ADSs rose $4.16 per ADS, or 32%, to close at $17.32 per ADS. However, the temporary inflation in the price of the Company’s ADSs would be short-lived as the market soon realized that the going private transaction was not likely to happen.

Then, on September 15, 2011, the Company issued a press release announcing that the Special Committee of its Board of Directors received a notice from defendant Hu and companies affiliated with him that “they have unanimously determined to withdraw the non-binding going private proposal dated May 14, 2011.”

In reaction the announcement of the withdrawal of the going private proposal, the price of CNinsure ADSs fell $1.64 per ADS, or 15%, to close at $9.03 per ADS. The price of the Company’s ADSs continued to fall during the next two trading days as the market continued to digest the Company’s announcement, closing at $7.31 per ADS on September 19, 2011.

Plaintiff seeks to recover damages on behalf of all purchasers of CNinsure ADSs during the Class Period (the “Class”). Plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site ( http://www.rgrdlaw.com) has more information about the firm.

Copyright Business Wire 2010

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