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.