China Auto Logistics Inc.
- Company Name
- China Auto Logistics Inc.
- Stock Symbol
- Class Period
- March 28, 2017 to April 13, 2018
- Motion Deadline
- August 4, 2018
- District of New Jersey
The complaint charges China Auto and certain of its officers with violations of the Securities Exchange Act of 1934. China Auto sells and trades imported automobiles in the People’s Republic of China.
The complaint alleges that throughout the Class Period defendants made false and misleading statements and/or failed to disclose adverse information regarding the Company’s business operations, including that China Auto had failed to maintain adequate internal controls over identifying and reporting certain relationships and related transactions. As a result of defendants’ failure to disclose this adverse information, China Auto securities traded at artificially inflated prices during the Class Period, with its shares reaching a high of more than $5 per share.
On April 2, 2018, China Auto filed a Form NT 10-K with the SEC stating that it was unable to file its annual report on Form 10-K in a timely manner because it needed more time to “identify certain related party transactions” and had “identified a material weakness in internal controls and procedures over identifying and reporting certain relationships and related transactions.” On this news, the price of the Company’s shares fell over 19% to close at $2.79 per share on April 2, 2018.
On April 10, 2018, China Auto disclosed in a Form 8-K filed with the SEC that its “Audit Committee deemed it advisable to initiate an investigation into . . . allegations” of “related party transactions from a shareholder” of the Company.
Then on April 13, 2018, after the market closed, China Auto filed a Form 8-K reporting that its stock faced delisting from the NASDAQ for the Company’s failure to timely file a Form 10-K for the period ended December 31, 2017. The Company also reported that the Audit Committee’s investigation was “the reason for the Company’s inability to timely file its Form 10-K.” On this news, the price of China Auto shares fell nearly 9%, to close at $2.45 per share on April 16, 2018.