6 years Ago, MarcWites
Kaplan Fox t Kilsheimer LLP (www.kaplanfox.com) and Wites Law Firm (www.wklawyers.com) have filed a class action suit against NQ Mobile, Inc. (“NQ Mobile” or “Company”) (NYSE: NQ), and certain officers and directors of the Company, alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 on behalf of purchasers of NQ Mobile ADRs during the period May 5, 2011 through October 24, 2013, inclusive (the proposed “Class”), including investors who purchased ADRs in the May 2011 IPO underwritten by Piper Jaffray t Co., Oppenheimer t Co., and Canaccord Genuity.
The complaint alleges that NQ Mobile, formerly “Netqin Mobile Inc.,” is a Cayman Islands company with dual headquarters in Texas and China. Founded in 2005, NQ Mobile claims to provide mobile internet security services, privacy and virus protection, parental control, video games and productivity solutions for mobile phones. In May 2011, the Company went public with an IPO (the “IPO”) issuing 7.75 million ADRs, representing 38.75 million Class A common shares.
On October 24, 2013, research company Muddy Waters LLC issued an 81-page report (click here) which began, “NQ is a massive fraud.” Among other things, Muddy Waters reported that a majority of NQ’s China revenue is fraudulent; its largest customer is actually owned by the Company; NQ’s market share was overstated several times over; the Company’s most important product, its “Antivirus 7.0,” was actually spyware that made customer phones more susceptible to hacking; NQ is surreptitiously gathering personally identifiable information from customer phones without their knowledge or consent and transmitting back to the Company in China; and several acquisitions were actually shell companies. NQ shares plunged on the news, falling from $22.98 per share to $12.09 in one day. The Company’s market capitalization fell from more than $1 billion to approximately $500 million, wiping out approximately half a billion dollars of shareholder value in a single day. Trading was halted.
On November 3, 2013, Bloomberg News published an article confirming many of Muddy Waters’ accusations. Two days later, on November 5, 2013, the Company’s own lead manager in the IPO, Defendant Piper Jaffray, announced it had suspended its rating on the stock. Erik Lam, director of Asian equity sales at Auerbach Grayson t Co., said “Obviously it would cause tremendous concern, especially if it’s the IPO lead manager.” Shares plunged further, closing at $9.52.
If you are a member of the proposed Class, you may move the court no later than December 27, 2013 to serve as a lead plaintiff for the proposed Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.
The case was filed in the United States District Court for the Eastern District of Texas.
Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox t Kilsheimer LLP and Wites Law Firm For more information about the complaint, or if you would like to obtain a copy of the complaint, you may contact Kaplan Fox (www.kaplanfox.com) or Wites Law Firm (www.wklawyers.com).