Yangtze River Port and Logistics Limited
- Company Name
- Yangtze River Port and Logistics Limited
- Stock Symbol
- Class Period
- February 2, 2016 to December 5, 2018
- Motion Deadline
- March 3, 2019
- Eastern District of New York
The complaint charges Yangtze and certain of its officers with violations of the Securities Exchange Act of 1934. Yangtze operates through its wholly-owned subsidiary, Wuhan Yangtze River Newport Logistics Co., Ltd. (“Wuhan”), which is a logistics and port management company that engages in the business of real estate and infrastructure development and operates a port logistics center.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Yangtze’s business and operations, including that Yangtze’s purported lease of the Wuhan Yangtze River Newport Logistics Center, the Company’s main asset, was a fabrication, and that Yangtze’s only operating subsidiary, Wuhan, was declared insolvent in China due to a number of default judgments against it. As a result of this information being concealed from investors, Yangtze securities traded at artificially inflated prices of more than $22 per share during the Class Period.
On August 27, 2018, Barron’s published an article that disclosed information regarding legal proceedings involving the Company. The article stated that Wuhan was “showing up on official websites in which Chinese courts list debtors with unpaid legal judgments.” According to the article, the “unpaid bills attributed to [Wuhan] total $120 million.”
Then on December 6, 2018, before the market opened, Hindenburg Research issued a report discussing Yangtze’s Wuhan subsidiary and the legal proceeding against the Company, which stated that Yangtze’s purported lease of the Wuhan Yangtze River Newport Logistics Center, the Company’s main asset, was a fabrication, and that the Company’s Wuhan subsidiary had numerous undisclosed legal proceedings and judgments against it and had been declared insolvent. On this news, the price of Yangtze shares fell $3.34 per share, or more than 28%, over the next two trading days, to close at $8.28 per share on December 7, 2018.