Fanhua, Inc. (Nasdaq: FANH)
A class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Fanhua, Inc. (Nasdaq: FANH) securities during the period between April 20, 2018 to August 27, 2018 (the “Class Period”).
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations, including that Fanhua had engaged in improper business practices, including irregular accounting, which overstated Fanhua’s financial assets and performance metrics in order to benefit Company insiders. As a result of these false statements and/or omissions, Fanhua securities traded at artificially inflated prices during the Class Period, with the price of the Company’s American Depositary Shares (“ADSs”) reaching a high of more than $36 per ADS.
On August 27, 2018, Seeking Alpha published a report by Seligman Investments regarding Fanhua. The report stated that “[b]ased on due diligence of [Chinese State Administration for Industry & Commerce] filings and other public information, we are deeply concerned about the company’s business practices.” The report asserted that the Company was “grossly exaggerating its number of insurance sales agents, and hence its potential for growth. . . . Our analysis suggests that the actual size of [the Company’s] sales channel is a mere 1/20th of the reported number.” The report also detailed a history of alleged fraud at the Company, including accounting irregularities in the Company’s second quarter 2018 financial results, and described “company insiders” engaging in “self-dealing tactics,” asserting that Fanhua’s “numerous acquisitions, mostly of other insurance intermediaries . . . are rife with related-party abuses.” On this news, the price of Fanhua ADSs fell $2.75 per ADS, or more than 10%, to close at $23.40 per ADS on August 27, 2018.
If you are a current shareholder and/or purchased stock pursuant during the period between April 20, 2018 to August 27, 2018 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.