During 2011, plaintiffs filed a wave of securities class action lawsuits against U.S.-listed Chinese companies. There were 39 of these lawsuits filed in 2011 (out of 218 total securities class action lawsuit filings in 2011), as discussed here. Often the complaints in these lawsuits consisted of little more than a repetition of the allegations that had been raised against the company in an Internet analyst report.
While the Internet reports often raised sensational allegations against the companies, the claimants still faced the problems associated with trying to substantiate these allegations – a challenging task under any circumstances, but even more so given political, legal and cultural differences involved, as well as language and other barriers. It should come as no surprise then that a few of these cases might just peter out.
Although there is no way to know for sure from the bare record, that certainly seems to be the case in the securities class action lawsuit that had been filed in 2011 against Yongye International.
As discussed at greater length here, plaintiffs first filed a securities class action lawsuit against Yongye and certain of its directors and officer in the Southern District of New York in May 2011. The complaint relied on a May 11, 2011 Seeking Alpha article entitled “Yongye International’s Reported Production: SEC Filings Raise Red Flags” (here). The article stated in part “that the company and its joint-venture partner could not have produced, and therefore sold, the reported plant product tonnages given the company’s stated manufacturing capacity and shipments.” Ultimately several class actions were filed, which were later consolidated and lead counsel was appointed. Lead counsel filed an amended complaint in December 2011. The amended complaint again was reliant on the allegations in the Seeking Alpha article.
On March 8, 2012, the company announced (here) that the lead plaintiff’s action had been voluntarily dismissed, with prejudice as to the lead plaintiff. A copy of the court’s March 6, 2012 order of voluntary dismissal can be found here. It is impossible to tell from the bare record what led up to the voluntary dismissal. However, from the court docket, it can at least be discerned that following a February 1, 2012 hearing in the case, Judge Richard J. Sullivan ordered that the plaintiffs file a further amended complaint by March 5, 2012. It appears that rather than submitting the amended complaint on March 5, the plaintiffs filed a motion to voluntarily dismiss the complaint, with prejudice as to the lead plaintiffs.
It was noted when these cases were flooding in that not perhaps all of these cases would prove to be meritorious and indeed some of them have been dismissed (refer for example here). On the other hand, other cases have survived the initial dismissal motions (refer for example here). The critical point is that even in those cases in which the plaintiffs’ claims survive the initial pleading threshold, their claims stiff face substantial challenges, not the least of which are problems involved with effecting service of process and in conducting discovery in China, as well as deriving from the geographic distances and language issues involved. (Refer here).
The tactical retreat in the Yongye case, even before the initial rounds of pleading were complete and before the threshold motions had even been filed, suggests at a minimum that the barriers involved in pursuing these cases in some instances may be prohibitive. And, without in any way suggesting that it was in fact the case with the Yongye lawsuit, some of the cases may have been filed in reliance on Internet reports and analysis that could prove difficult to substantiate.
Many of these cases are still only in their earliest stages. It remains to be seen have they will fare. There is the possibility that in many instances the cases against the U.S.-listed Chinese companies will not in the end amount to very much.
The Great Lionel Messi: Even those of you that do not follow International soccer have probably seen stories recently suggesting that FC Barcelona’s talented Argentine striker Lionel Messi may be the greatest soccer player ever. Even Time Magazine recently had an article asking the question. If you are wondering what all the fuss is about – which you might well do if you have only seen pictures of Messi, he looks, as one commentator suggested, like the valet parking attendant to whom you would hesitate to give your car keys – you will want to see this video of Messi’s amazing five-goal performance in Wednesday’s UEFA Champions League qualifier game between Barcelona and Bayer Leverkusen. A couple of the goals are the result of terrific passing but the rest of the goals are pure Messi.
As one commentator noted on the Eurosport blog (here):
To describe Lionel Messi as a good player, a great player, is a statement so facile as to render it pointless. Such is the utter brilliance of the Barcelona forward, we are not just running out of superlatives, as the old cliché has it, we are running out of ways to say we are running out of superlatives. He is a man for which conventional language is no longer sufficient.
But before we roll the videotape, let us pause for a few words in appreciation for APOEL Nicosia, the team from Cyprus that is the gatecrasher in the European club championship. If defending champion Barcelona is the team to beat, APOEL is the underdog team to watch and root for. APOEL knocked out the French powerhouse Lyon on Wednesday, in what one commentator said “ might have been the biggest sports moment in Cyprus’s history.”
Now, for Mr. Messi: