CNinsure Inc. hit by Investor Class Action Lawsuit over alleged Securities Laws Violations

Oct. 26, 2011 - PRLog -- An investor of CNinsure Inc.  filed a lawsuit in Southern District of New York against CNinsure Inc over alleged Violations of Federal Securities Laws.

If you purchased purchasers of CNinsure Inc.  American Depositary Shares during the period between March 2, 2010 and September 14, 2011, you have certain options and there are strict and short deadlines running. Deadline: December 16, 2011. NASDAQ- CISG shareholder should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

According to the complaint the plaintiff alleges on behalf of purchasers of CNinsure Inc. (NasdaqGS: CISG) ADSs during the period between March 2, 2010 and September 14, 2011, that CNinsure Inc. and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing materially false and misleading statements regarding the Company’s business and prospects.
On December 2 2010 Analyst Adele L. Mao at OLP Global LLC, an alternative research and consulting firm, issued a report with the title: “CNInsure (CISG) - Equity Incentives Likely Unaccounted For, Overstating Profits”. In the report analyst Mao said that even though CNInsure management denied during its 3Q10 earnings call that their so called “scorecard” program implemented to incentivize sales agents is an equity incentive plan, OLP Global uncovered more facts about the CNInsure’s so-called “scorecard” program, that they are convinced that it is no different from an equity-based compensation plan.
Shares of CNinsure Inc.  fell from $22.10 to $15.43 on December 2, 2010.

CNinsure Inc. issued a statement saying that it reiterated that the so-called share incentive certificate of CNinsure is nothing but scorecard for points. CNinsure Inc said it has never published any presentation on share incentive certificate and any publication that describes CNinsure's scorecard system as share incentive is not in conformity with fact.  Further CNinsure Inc said Finestart is an affiliated entity of Chengdu Jingshi Investment Co., Ltd. and Finestart does not have any interest or economic ties with CNinsure.

On March 1, 2011, CNinsure announced its Fourth Quarter and Fiscal Year 2010 Unaudited Financial Results. Among other things, CNinsure Inc. reported an increase in total operating costs and expenses and an increase in share-based compensation expenses  for the same quarter in 2009.

CNinsure ADSs fell $1.96 per ADS to close at $15.92 per ADS on March 2, 2011.

On May 16, 2011, CNinsure Inc.announced that it received a preliminary non-binding proposal letter from a company controlled by defendant Yinan 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 CNinsure Inc. for $19.00.

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

CNinsure ADSs fell $1.64 per ADS, or 15%, to close at $9.03 per ADS on September 15, 2011. NASDAQ- CISG stock continued to decline to as low as $6.01 on October 11, 2011.

Those who purchased purchasers of CNinsure Inc.  American Depositary Shares during the period between March 2, 2010 and September 14, 2011, have certain options and there are strict and short deadlines running. Deadline: December 16, 2011. NASDAQ- CISG shareholder should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

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The Shareholders Foundation, Inc. is an investor advocacy group. We do research related to shareholder issues and inform investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. At Shareholders Foundation, Inc. we are in contact with a large number of shareholders. We believe that together we can combine the interests of many investors, and use the size of our interest as leverage against the giant corporations. We offer help, support, and assistance for every shareholder. We help investors find answers to their questions and equitable solutions to their problems. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.