SAN DIEGO and PITTSBURGH, Nov. 20, 2013 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of FAB Universal Corporation (NYSE: FU) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers violated the Securities and Exchange Act of 1934 between June 15, 2012 and November 18, 2013 (the "Class Period"). FAB Universal engages in the distribution of digital entertainment products and services worldwide.
FAB Universal Accused of Failing to Disclose Related Party Transactions and Overstating Profits
Shares of FAB Universal fell $0.21, or 4%, to close at $5.46 on November 14, 2013, after the release of a report by Alfredlittle.com claiming that the company's financial performance, business prospects, and true financial condition were overstated. Then, on November 18, 2013, FAB Universal shares fell an additional $0.89, or 16%, to close at $4.40 following a GeoInvesting.com report revealing that the company failed to disclose to investors its issuance of RMB 100 million ($16.4 million) of bonds in China.
According to the complaint, FAB Universal substantially overstated the number of Intelligent Media Kiosks the company has deployed in China and that its Kiosks contain large amounts of unlicensed digital entertainment content. Further, the complaint alleges that the company's Chinese subsidiary issued RMB 100 million ($16.4 million) of bonds to Chinese investors in April 2013, which the company failed to report in its 2013 second and third quarter 10-Qs filed with the U.S. Securities and Exchange Commission.
FAB Universal Shareholders Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo
If you invested in FAB Universal and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: http://www.robbinsarroyo.com/shareholders-rights-blog/fab-universal-corp/
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP