Introduction
Thanks for your interest in this blog.
-- http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=7660224&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077
The IPO was priced at $5.50 and 3 million shares was sold to thousands of people.
After approximately 4 months after the IPO, the CEO resigned abruptly.
In February 2012, a website in China raised a red flag that the company's only operating asset was on auction because the company failed to pay its approximately $4.5 million debt to the Agricultural Bank of China which resulted from an Enforcement Order against TIBET issued by the PRC Yunnan Court due to TIBET's failure to pay its debts based on a previous Court judgement . For the auction, see:
http://www.fycqjy.com/cq/102733/102735/98706.html
On Feb 27, 2012, the CEO Mr. Yu Hong announced a $3 buyout offer and claimed the independent directors were reviewing it. Due to this news, the share price increased by more than 150% and there was massive dumping of shares during this period. To address the alleged auctioning of the company's main operating asset, the dubious CEO also announced that an investigation of the auction would be conducted. Till date, there is no evidence that any investigation was conducted. For the dubious buyout offer news and Form 8-K filed with the SEC, see:
http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=8452845&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077
On April 3, 2012, the stock was halted by NASDAQ and additional information requested.
TIBET failed to respond to NASDAQ and also failed to update its shareholders what the additional information requested by NASDAQ were. TIBET also failed to file its audited financial statement for 2011 in Form 10-K. As a result, NASDAQ delisted the stock on April 27 and the reasons provided in :
http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=8601130&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077
http://ia601507.us.archive.org/23/items/gov.uscourts.vid.29452/gov.uscourts.vid.29452.1.0.pdf
Some detailed research publications on TIBET can be found in:
- http://cer8.wordpress.com/2012/06/29/tbet-a-fraudulent-ipo/
- http://cer8.wordpress.com/2012/05/24/tbet-more-about-its-ipo-money-3/
- http://cer8.wordpress.com/2012/05/18/tbet-the-ipo-money-should-still-be-in-the-u-s/
TIBET IPO Underwriter
OINK, DHRM, EFUT, SINO, PSOF, RCON, TRIT
Most of these companies are not yet delisted and are still trading in either NASDAQ or NYSE main boards but their share prices have been decimated from their original IPO prices. PSOF successfully completed a management buyout & go-private transaction in 2012.
Key Reason Why the IPO Underwriters are Fully Responsible and Liable
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7660224-963-652903&type=sect&TabIndex=2&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077
"We will have an ongoing relationship with our Placement Agent that may impact our shareholders’ ability to impact decisions related to our operations.
April 15, 2013
IPO Money Questions
- Where is the IPO money now?
- Another key question would relate to Hayden Zou’s registration of TBET’s Hong Kong subsidiary, to which Hayden Zou retains the sole discretionary control even today. This Hong Kong subsidiary, registered in Hong Kong under the name of “Tibet Pharmaceuticals, Inc.”, should still hold the IPO money now. As TBET has never obtained the necessary Chinese government’s approval to transfer the IPO money cross the border to TBET’s Chinese operating entity in China, if the IPO money is not still in Hong Kong, then Hayden Zou should provide a detailed explanation of where it is?
- What measures, if any, did Board of Directors and Board Observers (Mac Downs and Hayden Zou) took to safe guard the IPO money?
- Who had control over the IPO cash? To what bank account did the investment bankers send the IPO cash? And where did it go from there?
- TBET’s IPO prospectus talked extensively about the responsibilities of the Board of Directors and Observers to oversee the company’s operations and to safeguard shareholders’ interest. Among those, the directors and observers were supposed to have regular meetings, to approve capital expenditures and to review the auditor’s reports. Have they done so? If yes, provide transcript of all board meetings till date.
- Why haven’t the Board of Directors and Observers perform their fiduciary responsibility by providing an update to the shareholders regarding the state of the company since it was delisted from NASDAQ on April 27, 2012?
- When did the Board of Directors and Observers first become aware of the allegations that the operating company (Shangri-La Tibetan Medicine Company) had an undisclosed debt obligation to a Chinese bank?
- What did the Board of Directors and Observers do when they became aware of this allegation?
- What did the Board of Directors and Observers do when it received the going private offer letter from the President Mr. Hong Yu?
- What did the Board of Directors and Observers do when Mr. Hong Yu failed to file the 10-K?
- 11. Has the Board of Directors and Observers considered replacing the President Mr. Hong Yu?
- Has the Board of Directors and Observers taken any steps to get the 2011 and 2012 financial statements prepared and audited?
- When is the last time any of the Board of Directors and Observers had any contact with Mr. Hong Yu?
- Why haven’t the Board of Directors and Observers provided any form of update to the shareholders regarding the going private offer from Mr. Hong Yu after more than one-year as they promised the general public in the news release that was issued by the company? Was this offer made to manipulate and increase the share price or push for IPO money to be transferred to china? If not, why was the offer made and why haven’t shareholders received any form of update till date?
- Has the Board considered the liquidation of the company? As TIBET’s shares are currently illiquid, are the Board of Directors and Observers considering approving Mr. Hong Yu offer or any other alternative share buyback of all the 3 million IPO shares that currently has no liquid market for it?
- When did Mr. Hong Yu request that the IPO funds be sent to the Chinese subsidiary? What did he say would be the use of such funds? What was the Board's reply to his request?
- Have the Board of Directors and Observers ensured TIBET’s Securities and Exchange Commission IPO filings and subsequent financial statements correctly reflects the business of the company?
- Why did SHERB & Co., LLP (the most recent auditor of TIBET) refuse to sign-off and provide an audit opinion on TIBET’s 2011 end of year audited 10-K financial statement? As this was a material event that resulted in the eventual delisting of the company’s shares from NASDAQ, why were the reasons not disclosed to the shareholders (the owners of the company) and general investing public?
- As TIBET’s IPO Auditor, what steps did ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP took to independently verify the credibility and accuracy of the information in the audited financial statements provided in the IPO for years ending in 2008, 2009 and 2010?
- As TIBET’s public Auditor after the IPO and until September 2011, what steps did ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP took to independently verify the credibility and accuracy of the post-IPO 10-Q quarterly financial statements that were issued to the general public?
- After resigning as TIBET’s Auditor on September 12 2011, ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP (ACSB) made an SEC filing indicating that the principal accountant's reports of ACSB on Tibet's financial statements for the years ended December 31, 2009 and 2010 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. This was a very compelling statement from a company that claims to be a licensed independent registered public accounting firm in the USA. The general investing public makes their investment decisions by seriously taken into account audit opinions provided by auditors like ACSB or the financial gatekeepers of public companies. With all that had happened over the past year, does ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP still think and believe that its SEC filings and IPO audit opinions on TIBET financial statements were credible and reliable?
May 1, 2013
Consequently, any Rescission award will likely result in the adoption of the sliding formula described in details in Sections 11 and 12 of the USA SEC ACT of 1933 as summarized below:
Section 11
- The defendants must pay the victims the difference between the amount paid for the security (not exceeding the IPO price) and the value thereof as of the time such suit was brought, or
- the difference between the amount paid for the security (not exceeding the IPO price) and the price at which such security shall have been disposed of in the market, or
- the difference between the amount paid for the security (not exceeding the IPO price) and the price at which such security shall have been disposed of after suit but before judgment if such damages shall be less than the damages representing the difference between the amount paid for the security (not exceeding the IPO price) and the value thereof as of the time such suit was brought.
- the victim can sue to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if he no longer owns the security.
July 4, 2013
Hayden Zou said: “I never had any influence over matters submitted to Tibet's Board of Directors because, to my knowledge, 'Tibet never held any Board meetings”.
- The Board of Directors never met to perform their Fiduciary Responsibilities and Corporate governance roles for the entire time TIBET was issuing statements to the SEC and the general investing public.
- The Board of Directors never met to review the quarterly reports and financial statements.
- The Board of Directors never met to review the fictitious Buy Out offer that the Criminal CEO Mr. Yu Hong claimed the Board of Directors had received.
- The Board of Directors never met to investigate the Auction that the CEO claimed would be investigated by the Company.
- The Board of Directors never met to review the final IPO prospectus or discuss how to utilize the IPO proceeds.
- The Board of Directors members in the Audit Committee never held a meeting with the Auditors of the Company.
- The Board of Directors never met to discuss the resignation of the former CEO.
- The Board of Directors never met to discuss the resignation of the IPO Auditor and the appointment of the new Auditor.
- The Board of Directors never met to discuss TIBET's failure to file its 2011 audited financial statement.
- The Board of Directors never met to discuss the delisting notice from NASDAQ.
August 9, 2013
- Defendants failed to disclose that there was an enforcement order against TIBET in the IPO.
- Defendants failed to disclose in the IPO that the Court had ordered the liquidation of TIBET's only operating entity in China.
- As such, the information contained in the IPO was misleading and false.
- TIBET failed to file any other audited financial statement with the SEC after the IPO. As such, all investors that purchased stocks of TIBET based their decision on the misleading audited financial statements in the IPO prospectus.
- If the Defendants had completed a legal check, they would have discovered that TIBET was already bankrupt while they were issuing the IPO propectus to investors.
- This crime was not a chance crime. It was an intentionally planned crime which the Defendants could not have prevented because they were reckless and careless, consistent with their actions after the IPO as stated in the recent Affidavit by Hayden Zou which he swore under Oath that TIBET Board of Directors never held a single Board Meeting! Simply mind boggling!!
- Defendant's reckless actions caused many innocent victims to be significantly damaged because TIBET shares are now worthless and illiquid.
- Defendants are still in full control of the IPO money till date.
October 11, 2013
November 25, 2013
- the failure to perform sufficient audit procedures to evaluate whether goodwill was impaired;
- the failure to perform sufficient audit procedures to evaluate the accounting for a transfer of buildings and related land use rights;
- the failure to perform sufficient audit procedures to test revenue;
- the failure to perform sufficient audit procedures to test accounts receivable;
- the failure to perform sufficient audit procedures regarding warrants;
- the failure to perform sufficient audit procedures to test the valuation of stock-based compensation; and
- the failure to evaluate the effect of reported material weaknesses on the nature, timing, and extent of substantive procedures performed in the audit of the financial statements.
November 30, 2013
By this Order, the Public Company Accounting Oversight Board (the "Board" or "PCAOB") is censuring David T. Svoboda, CPA ("Svoboda" or "Respondent"), and barring him from being an associated person of a registered accounting firm. The Board is imposing these sanctions on the basis of its findings that Svoboda: (a) violated PCAOB rules and auditing standards in connection with the audits of three issuer clients and the improper creation, addition, and backdating of audit documentation prior to a Board inspection; (b) directly and substantially contributed to a registered public accounting firm's violation of PCAOB quality control standards; and (c) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients. For more on this Order click:
http://pcaobus.org/Enforcement/Decisions/Documents/20131121_Svoboda.pdf
These sanctions from the PCAOB against the disgraced Tibet's IPO Auditor clearly demonstrates and proves how malicious, dubious, reckless and negligent the Auditor was in executing its role as the financial gatekeeper of the issuers they were auditing. They were reckless beyond any ethical and professional standards including the improper creation, addition, and backdating of audit documentation prior to Board's inspection thereby compromising the independency of the Audit.
Based on PCAOB findings, the Auditor basically was outsourcing the Auditing Work to another China Firm that was not registered with the PCAOB and as such lacked proper trainings of the USA PCAOB Auditing Standards and Quality Control procedures. The Auditor failed to train these Chinese staffs who were significantly conducting the audit on their behalf in China. The Auditor in many cases failed to confirm suppliers and customers transactions and even went as far as creating the Consolidated Financial Statements for these companies thereby "Not Acting Independent" of the Chinese company as required in the PCAOB Auditing Standards. Their actions were disgusting, malicious, highly unethical and cruel!! They are a DISGRACE to the auditing profession and to the intent of the Auditing Practices. They betrayed all the Public Trust and Authority given to them as Auditor of these Chinese Companies thereby misleading investors and causing significant financial losses.
December 13, 2013
- Most Class Action Lawyers are often driven to get settlement for profit reasons which is usually against the interest of victims seeking true Justice from the Court through Jury Trial against defendants that have harmed them.
- Most Class Action Settlement negotiations fails to properly assess and calculate the exact amount of damages in dollars incurred by all Class members. As such, settlement negotiations are often done without any factual evidence backing the actual percentage of recovery that the victims in the Class are getting. As an example, when there is a settlement for a specific amount, there is no document or evidence disclosing how much loss in total was actually incurred by Class Members. There is no document specifying how much percentage of the actual loss incurred by all Class members would be recovered. This critical information that can be readily obtained through retaining the services of an Independent Damage Expert is often not investigated and disclosed thereby making the assessment of the fairness Opinion of Class Action settlement highly dubious, questionable and opaque.
- On the other hand, a victim who opted out and filed a private lawsuit against devious and malicious defendants that have harmed him or her would be seeking specific amount in damages consistent with the total amount of money he or she lost from the scam. This is significant because it presents to the Court the actual specific amount the victim is seeking unlike in Class Action that never provides this level of detail per Class member.
- The legal fees, expert fees, expenses and claim administration fees are so high that it renders the effectiveness of the whole Class Action process highly questionable for victims of cruel crimes.
- For the defendants, Class Action represents a very good option for them because once they settle a Class Action Case at laughable and ridiculously low recovery percentage, the Ignorant Victims in the Class that accepted the Settlement and failed to Opt Out would be Bound Forever not to bring any other lawsuit in the future against the defendants on the same matter.
- Section 11 of the USA SEC ACT of 1933 requires the loss incurred by each Class member to be calculated through subtraction of the price paid by the victim (not to exceed the IPO price) from the price sold. This method in the 1933 ACT provides the most reliable method of calculating the total loss incurred by all the Class members. For example, a company like TIBET that issued 3 million shares in the IPO but had insiders with approximately 11.8 million shares owned by insiders including Hayden Zou, Phillip Zou and their Company Fulcan Investments LLC, RMCC Investments LLC and Broadview Richfield Holdings LLC and Investor Relation Firm like Trilogy Capital that was issued around 33,334 shares. If all these approximately 11.8 million shares were dumped in the market which is highly likely, you would see the significant flaw in the Class Action. It would definitely result in more than 14 million damaged shares and not just only the 3 million IPO shares. These are specifics damage calculation that must be investigated to assess the true magnitude of the damage incurred by the Class victims.
December 14, 2013
Potential Conflict of Interest - IPO Agent Board Observer and Tibet
June 13, 2014
- Hayden Zou (Board Observer) : Plotting to bring new Chinese company into the USA market again.
- Lewis Mccarthy Downs III (Board Observer): Currently working out of a satellite office for Capitol Securities Management, Inc. He is still a Registered Broker with FINRA CRD# 1184428.
- Anderson and Strudwick (Underwriter): Acquired by Sterne Agee; former CEO Damon Joyner is now President and Chief Executive Officer of Sterne Agee Clearing based in Alabama.
- The Auditor ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP (ACSB) no longer exist and has transformed to Acquavella, Chiarelli, Shuster & Co., LLP. ACSB censured and banned by PCAOB for two years. Audit Head David Svoboda banned for three years by PCAOB and currently the Owner and Managing Member of David Svoboda CPA, PLLC.
- Sherb & Co: Most recent auditor also censured and banned by the PCAOB.
- Yu Hong, CEO - Vanished
- Taylor Guo, Ex CEO & Director - Vanished
- Sabrina Ren, CFO - Vanished
- Dr. Wenbo Chen, Director - Vanished
- Solomon Chen, Director - Vanished
- Youhang Peng, Director - Defendant
July 7, 2014
I’ve had the chance to read through Mr. Hayden Zou’s Motion to Dismiss filed on July 7 with the Court.
o "We will have an ongoing relationship with our Placement Agent that may impact our shareholders’ ability to impact decisions related to our operations. In connection with this offering, we have agreed to allow our Placement Agent to designate two non-voting observers to our Board of Directors until the earlier of the date that:(i) the investors that purchase shares in this offering beneficially own less than five percent (5%) of our outstanding shares; or(ii) the trading price per share is at least four (4) times the offering price for any consecutive 15 trading day period.Although our Placement Agent’s observers will not be able to vote, they may nevertheless significantly influence the outcome of matters submitted to the Board of Directors for approval. We have agreed to reimburse the observers for their expenses for attending our Board meetings, subject to a maximum reimbursement of $6,000 per meeting and $12,000 annually, which amount is not more than the reimbursement payable to our directors. The observer will be required to certify that such travel expenses are not reimbursed by any other party. We will also pay observers the same amount as our independent directors receive. As of the date of this prospectus, Mr. L. McCarthy Downs III and Mr. Hayden Zou are serving as our Placement Agent’s observers to our Board of Directors. See “Management – Board of Directors Observer.”
o The statement above is self explanatory and clearly shows that the Board Observers have significant influence on the outcome of matters submitted to the Board of Directors for approval, thereby making a Section 11 Defendant.
o Additionally, Mr Zou played significant roles that influenced the registration of the IPO and these roles and his share based compensations are well documented in the IPO Prospectus. As such, Mr. Zou cannot claim ignorance of these facts. The following is the shareholding information contained on Page 39 of the IPO Prospectus on SEC's website: http://www.sec.gov/Archives/edgar/data/1489077/000119312511009307/d424b3.htm"On March 26, 2010, YSTP and each of the shareholders of YSTP entered into an Entrusted Management Agreement, Exclusive Option Agreement, Shareholders’ Voting Proxy Agreement and Pledge of Equity Interest Agreement (collectively, the “Control Agreements”) with WFOE in return for ownership interests in TBET. Through the organization of TBET as a holding company, 19 YSTP investors (or, in some cases, entities they control) now own a total of 10,983,750 of the common shares of TBET. Of the remaining 898,750 TBET common shares, 30,000 are owned by early-stage investors who paid a total of $100,000 for their shares. The remainder of 798,750 common shares belong to five other investors, as follows: 424,375 shares are held beneficially by two early-stage investors (Hayden and Philip Zou) and their company (Fulcan Investments, LLC), and a total of 374,375 shares are held by two entities and one individual who provided services, as follows: 20,000 shares owned by Richard Ng, who paid $300 and also provided services to us at the request of Fulcan Investments, LLC; 177,187 shares owned by RMCC Investments, LLC, which provided services to Fulcan Investments, LLC; and 177,188 shares owned by Broadview-Richfield Holdings, LLC, an entity controlled by shareholders of our U.S. legal counsel, which provided services to Fulcan Investments, LLC and our company. Mr. Zou transferred his right to receive these shares to Mr. Ng, RMCC Investments, LLC and Broadview-Richfield Holdings, LLC. “. As Hayden Zou co-owns Fulcan Investments LLC as disclosed in the IPO and 424,375 shares of Tibet can be originally traced back to Hayden Zou, Phillip Zou and their company Fulcan Investment LLC; Hayden Zou cannot claim ignorance of the contents of the IPO Prospectus. Additionally, 177,187 shares were issued to the entity RMCC Investments LLC (RMCC) for services provided to Hayden Zou's Fulcan Investment LLC. Also, 177,188 shares were issued to Broadview-Richfield Holdings LLC owned by the U.S. legal counsel that provided services to Hayden Zou's Fulcan Investments LLC in relation to the IPO. Based on the foregoing, there is definitely a compelling evidence of vested interest and influence by Hayden Zou (the IPO Underwriter's Agent Board Observer) during the course of Tibet’s IPO Registration. As such, it would be unacceptable, lies and deceptive for Mr Hayden Zou to claim ignorance of these facts.
-We need Mr. Zou to provide clarity about why, when and how the Zou Family became early investors in TIBET, and why they have such close linkages to Tibet as an early investor.
- Verify if Mr. Hayden Zou or Mr. Philip Zou or relatives or friends have been dealing with TBET shares following the IPO (i.e., non-disclosed insider trading).
- Verify the details of the specific services Hayden Zou and his company Fulcan Investments LLC rendered to TIBET that warrants many TIBET shares to be issued to Zou, his company and other entities associated with him for these services.
- Another outrageous reason he mentioned in his motion is that he did not influence any matter because Tibet Directors never held single meeting. I personally found this statement damning and highly demonstrates an act of bad faith by him and the other defendants. By saying repeatedly in his motion that TIBET never held a board meeting for the whole time it raised the IPO Money till it was delisted, Hayden Zou is therefore stating that in the midst of all these key material events below:
o The Board of Directors and Board Observers never met to review the final IPO prospectus or discuss how to utilize the IPO proceeds.
o The Board of Directors and Board Observers never met to perform their Fiduciary Responsibilities and Corporate governance roles for the entire time TIBET was issuing material financial statements to the SEC and the general investing public.
o The Board of Directors and Board Observers never met to review the quarterly reports and financial statements.
o The Board of Directors and Board Observers never met to review the fictitious Buy Out offer that the CEO Mr. Yu Hong claimed the Board of Directors had received.
o The Board of Directors and Board Observers never met to investigate the Auction that the CEO claimed would be investigated by the Company.
o The Board Observers and Board of Directors members in the Audit Committee never held a meeting with the Auditors of the Company.
o The Board of Directors and Board Observers never met to discuss the termination of the former CEO Mr. Taylor Guo on June 6, 2010 and the appointment of the new CEO Yu Hong.
o The Board of Directors and Board Observers never met to discuss the abrupt resignation of the IPO Auditor ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP (ACSB) on September 12, 2011 and the appointment of the new Auditor Sherb & Co .
o The Board of Directors and Board Observers never met to discuss TIBET's failure to file its 2011 audited financial statement.
o The Board of Directors and Board Observers never met to discuss the delisting notice from NASDAQ and how to respond to the exchange inquiries.
This outrageous statement by Hayden Zou basically proves and demonstrates beyond any reasonable doubt that the defendants acted deliberately in bad faith and were intentionally reckless& negligent, consistent with their reckless & negligent actions that resulted in false and misleading information to be included in the IPO prospectus, thereby preventing them from discovering the fraud.
July 8, 2014
Defendants Sterne Agee, ACSB and Mccarty filed motion to dismiss. Sterne Agee seeked dismissal based on stating that it acquired only subsets of Anderson & Strudwick and not the liabilities. While all the key viable assets of Anderson and Strudwick including key management staff were all acquired by Sterne Agee, Sterne found it wothwhile to say that it is not liable for the sins of a company it acquired almost almost all its viable assets. This is simply ridiculous! What Stern failed to disclose is that the President & CEO of Anderson & Strudwick as at the time of the IPO, Mr. Damon Joyner, is now President and Chief Executive Officer of Sterne Agee Clearing.I have reviewed Mccarty’s Motion and just like Zou’s Motion, he failed to address any of the key issues and danced around it. Mccarty also centered his argument on not being a Section 11 defendants and that Tibet never held a single board meeting and as such he never influenced any Board’s decision.
My responses to Mccarty’s Motion are the same as those provided above for Hayden Zou. It is simply mind boggling that the defendants have the audacity to repeat over and over again that TIBET never held a single board meeting when in fact there were many evidence backed material events including the IPO that would require, as a minimum level of due-diligence, a board meeting to review the contents of the IPO Prospectus and the financial statements. The IPO prospectus clearly described his role as a Board Observer & IPO Underwriter Agent, and his authority to significantly influence Board’s decision, and that his compensation is similar to that of an independent director.
It would be highly unethical and unprofessional for Mccarty to claim that the Board Observers never met with Tibet’s Board of Directors, to at least review the contents of the IPO Prospectus that they were marketing to the general investing public; the least due diligence duty any ethical professional in the financial industry can do.
By repeating over and over again that the Board Observers and IPO Agents never held a single meeting with the Board of Directors and never influenced any Board’s decision, Mr. Mccarty and Hayden Zou are demonstrating beyond any reasonable doubt that the defendants acted in the worst level of BAD FAITH expected from a financial professional in protecting the interest of the general investing public, therey supporting our complaint that the defendants were highly reckless, cruel, acted in bad faith and negligent.
On pages 23 and 24 of the Auditor’s Motion, the Auditor stated the following:
“Even examining other facts alleged in the complaint, reveals that the events occurred unconnected to the audit opinion, which was of the financial statements as of December 31, 2009. Specifically, the bank judgment, seizure of assets and public auction all occurred after ACSB issued its audit opinion. ACSB opined about year end 2009, but the judgment occurred September 10, 2010, the assets were frozen on January 10, 2011 and the assets were auctioned on February 17, 2012. These are the events that allegedly caused Plaintiffs’ loss and which are alleged should have been disclosed in the registration statement or otherwise. However, as all of these events took place after the year audited by ACSB, nothing in ACSB’s audit opinion could have led to the alleged losses. Here, the allegations set forth in the complaint require dismissal due to a lack of loss causation as to the statements attributed to ACSB. Whether this is called a lack of causation or “negative causation,” the concept is that the events that led to Plaintiffs’ loss all relate to events after the period covered by ACSB’s audit opinion and the disclosures causing the loss had nothing to do with the ACSB audit opinion. As a result, there can be no liability as against ACSB for those losses”.
For the Auditor's statement above, I disagree with the Auditor’s lies that the events occurred after the audit opinion of December 2009. Even though the Chinese Court Judgement was issued on September 10, 2010, the event that lead to it took many years. The complaint and Bank Suit clearly indicated that the three loans from the Agricultural Bank of China occurred from 1999 to 2003 totaling RMB 20,630,000 as presented in the Table below. The loan dates indicated in the table clearly shows that debt existed during the 2008 and 2009 Audit work.
Loan Date
|
Loan Amount
|
Balance Remaining
|
Dec 29, 1999
|
RMB 2,700,000
|
RMB 2,400,000
|
Aug 15, 2003
|
RMB 10,230,000
|
RMB 10,230,000
|
Oct 16, 2003
|
RMB 7,700,000
|
RMB 7,700,000
|
Total
|
RMB 20,630,000
|
RMB 20,330,000
|
What I also found damning & incredible is that Auditor indicated that the last Audit Opinion was based on the December 2009 Audit. What this suggest is that no Audit was completed throughout January to December 2010 . As such, the IPO was based on an outdated and expired Audit Opinion exceeding one year old. The Underwriter, Auditor and other defendants failed miserably to demand for another audit considering the more than 12 months gap in dates from the last 2009 Audit. This again highly demonstrates beyond reasonable doubt how careless, reckless and negligent the defendants were in performing their basic due diligence duties associated with the IPO.
August 30, 2014
The Plaintiff's lawyer filings include the following interesting statements against the defendants. With respect to the $14.42 million in net proceeds from the IPO they were first deposited in an escrow account at SunTrust Bank in Virginia, which was set up by Defendant Anderson & Strudwick (“A&S”), the investment banking firm that underwrote the IPO and solicited Plaintiffs and class members to purchase stock in the IPO. ¶¶ 73, 133. A&S then transferred the funds to the HSBC bank account of Tibet’s Hong Kong subsidiary, China Tibetan, which is completely controlled by Defendant Zou. In order for the proceeds of the IPO to be transferred to Tibet’s operating subsidiary (and effectively Tibet), China Tibetan was required to submit an application with the PRC State Administration of Foreign Exchange or “SAFE”. Both Tibet’s SEC filings as well as records in the PRC of Tibet’s operating subsidiary confirm that this transfer of funds never occurred and that therefore all of the proceeds from the IPO should continue to remain in the HSBC bank account of Tibet’s non-operating Hong Kong subsidiary which is controlled by Defendant Zou. If the funds are not in China Tibetan’s bank account, then Zou is responsible for their disappearance.September 3, 2014
All the Defendants filed their responses today and there was nothing in their filings that I would consider new or significant from their past deceptive stories and lies including not having any single board meeting throughout the IPO process and not influencing anything. Basically, they can be saying we never heard of TBET. Simply cruel, damning and incredible!. Some of the ludicrous responses directly from the Defendant Zou regarding the whereabout of the IPO money collected from USA investors are (note: copied verbatim from Zou's response). But more significantly, Mr. Zou’s purported control of the IPO funds is completely irrelevant to the determination of whether he is a proper Section 11 defendant. Section 11 focuses exclusively on misrepresentations and omissions in the Registration Statement.Nowhere in their Complaint or their Opposition do Plaintiffs allege that the Registration Statement contained misrepresentations or omissions regarding the IPO proceeds. Thus, the status and location of the IPO proceeds is nothing but a meaningless distraction created by Plaintiffs.
- Here, there are no allegations of Mr. Zou’s knowledge of the alleged misstatements or omissions in the Registration Statement. Instead, Plaintiffs again merely point to the Complaint’s conclusory and baseless allegations that Mr. Zou controlled Tibet and the IPO proceeds. Opp. at 13. However, as discussed above, the IPO proceeds and Mr. Zou’s alleged control over such proceeds is wholly irrelevant to the issue of whether the Registration Statement contains any material misstatements or omissions. Plaintiffs have alleged misstatements and omissions in the Registration Statement with respect to the financial condition of Tibet – not the location and control of the IPO proceeds; instead, in their Opposition, Plaintiffs attempt to impute Section 11 liability on Mr. Zou by focusing on their baseless and speculative allegations concerning the whereabouts of the IPO proceeds and Mr. Zou’s alleged control of such proceeds. Of note, Plaintiffs’ contention that Mr.Zou controlled the IPO proceeds is undermined by Plaintiffs’ own allegations. But in any event, the IPO proceeds and Mr. Zou’s purported control over such proceeds are completely irrelevant to the claims at issue. The Securities Act claims hinge on the existence, if any, of material misrepresentations and omissions in a Registration Statement and Mr. Zou’s involvement, if any, in such misstatements or omissions. Nowhere in their Complaint or their Opposition do Plaintiffs allege that the Registration Statement contained material misrepresentations or omissions regarding the IPO proceeds. Rather, the alleged material misstatements and omissions relate to the Registration Statement’s disclosures concerning Tibet’s overall financial condition. Thus, whether or not Mr. Zou knows the location of the IPO proceeds (he does not), or somehow controls such proceeds (he does not), is simply meaningless and an obvious distraction created by Plaintiffs to camouflage the meritlessness of their claims.
All the Defendants filed their responses today and there was nothing in their filings that I would consider new or significant from their past deceptive stories and lies including not having any single board meeting throughout the IPO process and not influencing anything. Basically, they can be saying we never heard of TBET. Simply cruel, damning and incredible!. Some of the ludicrous responses directly from the Defendant Zou regarding the whereabout of the IPO money collected from USA investors are (note: copied verbatim from Zou's response). But more significantly, Mr. Zou’s purported control of the IPO funds is completely irrelevant to the determination of whether he is a proper Section 11 defendant. Section 11 focuses exclusively on misrepresentations and omissions in the Registration Statement.Nowhere in their Complaint or their Opposition do Plaintiffs allege that the Registration Statement contained misrepresentations or omissions regarding the IPO proceeds. Thus, the status and location of the IPO proceeds is nothing but a meaningless distraction created by Plaintiffs.
- Here, there are no allegations of Mr. Zou’s knowledge of the alleged misstatements or omissions in the Registration Statement. Instead, Plaintiffs again merely point to the Complaint’s conclusory and baseless allegations that Mr. Zou controlled Tibet and the IPO proceeds. Opp. at 13. However, as discussed above, the IPO proceeds and Mr. Zou’s alleged control over such proceeds is wholly irrelevant to the issue of whether the Registration Statement contains any material misstatements or omissions. Plaintiffs have alleged misstatements and omissions in the Registration Statement with respect to the financial condition of Tibet – not the location and control of the IPO proceeds; instead, in their Opposition, Plaintiffs attempt to impute Section 11 liability on Mr. Zou by focusing on their baseless and speculative allegations concerning the whereabouts of the IPO proceeds and Mr. Zou’s alleged control of such proceeds. Of note, Plaintiffs’ contention that Mr.Zou controlled the IPO proceeds is undermined by Plaintiffs’ own allegations. But in any event, the IPO proceeds and Mr. Zou’s purported control over such proceeds are completely irrelevant to the claims at issue. The Securities Act claims hinge on the existence, if any, of material misrepresentations and omissions in a Registration Statement and Mr. Zou’s involvement, if any, in such misstatements or omissions. Nowhere in their Complaint or their Opposition do Plaintiffs allege that the Registration Statement contained material misrepresentations or omissions regarding the IPO proceeds. Rather, the alleged material misstatements and omissions relate to the Registration Statement’s disclosures concerning Tibet’s overall financial condition. Thus, whether or not Mr. Zou knows the location of the IPO proceeds (he does not), or somehow controls such proceeds (he does not), is simply meaningless and an obvious distraction created by Plaintiffs to camouflage the meritlessness of their claims.
February 20, 2015
The Court has issued an order today and the Plaintiffs won the Motion to Dismiss. This is a great news for all shareholders. Now the Case can move to discovery and trial. Defendants MUST secure the IPO funds for full rescission with interest as required in Section 11 of the SEC ACT.The following summarizes the Court responses to each Defendant including reasons for the denial:
Defendant SAG
SAG moves to dismiss Plaintiffs’ claims on the argument that Plaintiffs have failed to allege that SAG assumed liability for A&S’s role in the Tibet IPO. The general rule of corporate successor liability holds that a purchaser of a corporation’s assets “does not assume the liabilities of the seller merely by buying its assets.” Berg Chilling Sys., Inc. v. Hull Corp., 435 F.3d 455, 464 (3d Cir. 2006); see also Colman v. Fisher–Price, Inc., 954 F. Supp. 835, 838 (D.N.J. 1996) (same) (citing Ramirez v. Amsted Indus., Inc., 431 A.2d 811, 815 (1981)). The general rule against liability admits four limited exceptions: (1) when the purchaser expressly or implicitly agrees to assume the other company’s debts and obligations; (2) when the purchase is a de facto consolidation or merger; (3) when the purchaser is a mere continuation of the seller; or (4) when the transfer of assets is for the fraudulent purpose of escaping liability. Phila. Elec. Co. v. Hercules, Inc., 762 F.2d 303, 308–09 (3d Cir. 1985). SAG contends that Plaintiffs’ complaint fails to allege facts under which one of these four exceptions would apply. The complaint alleges only that SAG “acquired A&S and assumed all of the assets and liabilities of A&S.” (Am. Compl. ¶ 33.) Although this allegation is contested,3 this Court accepts it as true on a motion to dismiss. Accepting that SAG purchased all of the assets of A&S and assumed its liabilities raises “a reasonable expectation” that discovery may reveal additional evidence to find that SAG may be liable for A&S’s actions in the IPO under the exceptions for a de facto merger or mere continuation. See Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Moreover, this Court is not persuaded that the cases cited by SAG would counsel for dismissal on this ground. For example, in Westfield, LLC v. IPC, Inc., the court dismissed the plaintiffs’ claim because the plaintiffs pled only that the defendant purchased the assets of the prior corporation but failed to plead that the defendant “assumed the debts and liabilities” of the corporation—an allegation that Plaintiffs here have made. 816 F. Supp. 2d 745, 751 (E.D. Mo. 2011). For these reasons, SAG’s motion to dismiss is denied.
Defendant ACSB
ACSB makes a number of arguments to attack Plaintiffs’ claims against it. At this early stage in litigation, the Court finds ACSB’s arguments unavailing and denies its motion to dismiss. Plaintiffs bring claims against ACSB under Section 11 of the Securities Act of 1933, which provides a private right of action when “any part of the registration statement, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading.” 15 U.S.C. § 77k(a).4 To establish their Section 11 claim, Plaintiffs must show that Tibet’s registration statement “(1) contained an untrue statement of material fact; (2) omitted to state a material fact required to be stated therein; or (3) omitted to state a material fact ‘necessary to make the statements therein not misleading.” Cal. Pub. Employees Ret. Sys. v. Chubb Corp., 394 F.3d 126, 167 (3d Cir. 2004) (quoting 15 U.S.C. § 77k(a)).5 Plaintiffs allege that Tibet’s financial statement materially misrepresented Tibet’s financial position, including stating that Tibet had $27 million in assets (including $8.3 million in cash) and that Tibet owed $3.65 million on long-term loans as of September 30, 2010, when in fact Tibet had defaulted on a
$4.54 million undisclosed loan and was on the verge of bankruptcy. (Am. Compl. ¶¶ 48–51.) Plaintiffs further allege that the defaulted loan was the subject of a legal dispute before a Chinese court during 2010 and that the court entered judgment against a Tibet subsidiary on September 10, 2010. (Am. Compl. ¶¶ 52–56.) To be liable for a material misrepresentation or omission in a registration statement, a defendant must fit into one of five statutorily enumerated categories. See 15 U.S.C. § 77k(a). Plaintiffs allege that liability attaches to ACSB under the fourth category, which covers “every accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, who has with his consent been named as having prepared or certified any part of the registration statement, or as having prepared or certified any report or valuation which is used in connection with the registration statement, with respect to the statement in such registration statement, report, or valuation, which purports to have been prepared or certified by him.” 15 U.S.C. § 77k(a)(4).
ACSB argues that it cannot be held liable under Section 11 for the misrepresentations alleged above in the registration statement because an auditor may only be held liable for its own audit report—in other words, that Plaintiffs must allege that ACSB’s audit report itself contained material misrepresentations. Section 11, however, expressly imposes liability for misrepresentations in the financial statement on auditors who “prepare[] or certify[]” the registration statement, and Plaintiffs have alleged that ACSB certified the financial statements. (Am. Compl. ¶¶ 38–39, 94.) Moreover, the two primary cases ACSB cites in support of this argument, Deephaven Private Placement Trading, Ltd. v. Grant Thornton & Co., 454 F.3d 1168 (10th Cir. 2006), and In re IKON Office Solutions, Inc., 277 F.3d 658 (3d Cir. 2002), both
addressed auditor liability under other sections of securities law6—Sections 18(a) and 10(b) of the Securities Exchange Act of 1934, respectively—neither of which imposes liability on auditors for certifying financial statements as Section 11 does. Even were the Court to accept ACSB’s argument, Plaintiffs have also alleged that ACSB’s audit report stated that it was “conducted . . . in accordance with the standards of the Public Company Accounting Oversight Board” and that this statement was materially and objectively false: the complaint alleges that ACSB failed to exercise such appropriate professional care and judgment—for example, that ACSB did not verify basic information within the financial statement against Tibet’s bank statements, lenders, regulatory filings, or public records. (Am. Compl. ¶¶ 94–103, 105, 107.) See also In re IKON Office Solutions, Inc., 277 F.3d at 673 (an auditor’s certification represents that it “exercised appropriate, not flawless, levels of professional care and judgment” (citations omitted)). In short, Plaintiffs have alleged material and objective7 misrepresentations in sufficient detail to withstand a motion to dismiss.
Defendants Zou and Downs
Defendants Zou and Downs both move to dismiss the claims against them on the argument that they are not proper Sections 11 or 15 defendants.8 As noted above, Section 11(a) specifically enumerates five categories of potential defendants liable for misrepresentations in registration statements:
(1) every person who signed the registration statement;
(2) every person who was a director of (or person performing similar functions) or partner in the issuer at the time of the filing of the part of the registration statement with respect to which his liability is asserted;
(3) every person who, with his consent, is named in the registration statement as being or about to become a director, person performing similar functions, or partner;
(4) every accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, who has with his consent been named as having prepared or certified any part of the registration statement, or as having prepared or certified any report or valuation which is used in connection with the registration statement, with respect to the statement in such registration statement, report, or valuation, which purports to have been prepared or certified by him;
(5) every underwriter with respect to such security.
Plaintiffs assert that they have alleged facts sufficient to state a claim against Downs as an underwriter under the fifth category. The Securities Act defines an “underwriter” as “any person who has purchased from an issuer with a view to, or offers or sells for an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking.” 15 U.S.C. § 77(a)(11). Downs argues that, because the complaint alleges only that A&S functioned as underwriter for the Tibet IPO and does not allege the same for Downs, that he cannot be held liable as an underwriter under Section 11. Downs’s argument relies on too simplistic a reading of the complaint. Plaintiffs allege that Downs was a “Managing Director” of A&S and “one of the lead investment bankers who orchestrated Tibet’s IPO.” (Am. Compl. ¶ 35.) A&S, Plaintiffs allege, were underwriters in the Tibet IPO. (Id. ¶¶ 44–46, 73.) Additionally, Downs was listed in the registration statement and prospectus as an “observer” to the board of directors who may “significantly influence the outcome of matters submitted to the Board.” (Id. ¶ 35.)9 Downs’ reliance on In re Lehman Bros. Mortgage-Backed Securities Litigation is also misplaced. As Plaintiffs note, that court addressed whether ratings agencies, who participated in the structuring of mortgage loan pools, were properly alleged as liable underwriters. The Second Circuit affirmed the district court’s finding that plaintiffs “failed to allege that defendants ‘participated in the relevant’ undertaking: that of purchasing securities from the issuer with a view towards distribution, or selling or offering securities for the issuer in connection with a distribution.” 650 F.3d 167, 182–83 (2d Cir. 2011).
Plaintiffs’ allegations here, by contrast, suggest that Downs, in a position of control at A&S and a position of “significant[]” influence, if not control, at Tibet, was a primary actor in orchestrating A&S’ alleged underwriting of the Tibet IPO. In short, Plaintiffs have alleged that Downs participated in the underwriting. If these allegations cannot be borne out by the evidence, they will assuredly be dismissed at a later stage. Plaintiffs assert that they have alleged facts sufficient to state a claim against Zou as a “person performing similar functions” as a director under the second category. The complaint alleges that Zou, like Downs, was listed in the registration statement and prospectus as an “observer” to the board of directors who may “significantly influence the outcome of matters submitted to the Board.” (Am. Compl. ¶ 36.) Zou was also alleged to be the sole director of Tibet’s wholly owned Hong Kong subsidiary, China Tibetan. (Id.) The Court is not persuaded by Plaintiffs’ argument that a director of a subsidiary corporation is analogously functioning as a director of the parent as in In re Unicapital Corp. Securities Litigation where the court found that an individual named in registration statement as a soon-to-be director of a division of a company was a proper Section 11 defendant.10 149 F. Supp. 2d 1353, 1366–67 (S.D. Fla. 2001). A subsidiary is a legally distinct entity and not liable for the actions of its parent corporation. See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 341 n.44 (3d Cir. 2010). However, here, Plaintiffs have alleged that the subsidiary has played a key role in harboring proceeds from the IPO by detailing the typical process by which monies from an international IPO are transferred into China and citing statements from Tibet’s SEC filings that plausibly imply that China Tibetan (under the sole control of Zou) possesses the proceeds from the IPO. (Am. Compl. ¶¶ 72–82.)
These allegations, coupled with the naming of Zou in the registration statement and prospectus as an individual with “significant[] influence” over the Board, including the allegation that Zou was paid as any other board member, (Am. Compl. ¶ 36), plausibly allege that Zou’s role at Tibet was more akin to director than passive observer. Given these allegations, that he did not have voting power is not enough to dismiss the claims against him at this early stage of litigation.
CONCLUSION & ORDER
For the reasons stated above,
IT IS on this 20th day of February, 2015,
ORDERED that SAG’s motion to dismiss (Dkt. No. 102) is DENIED; and it is further
ORDERED that ACSB’s motion to dismiss (Dkt. No. 101) is DENIED; and it is further
ORDERED that Zou’s motion to dismiss (Dkt. No. 96) is DENIED; and it is further
ORDERED that Downs’ motion to dismiss (Dkt. No. 104) is DENIED.
IT IS SO ORDERED.
/s/ Hon. Faith S. Hochberg
Hon. Faith S. Hochberg, U.S.D.J.
February 15, 2015
SAG in its initial preliminary disclosure, identified the following people and entities:
Corporate representatives of SAG or its related companies who have knowledge relating to the Asset Purchase Agreement (“APA”) among Sterne, Agee & Leach, Inc., SAG, Anderson & Strudwick Investment Corporation and Anderson & Strudwick, Incorporated (the final two, collectively, “A&S”).
Current and former employees of SAG or its related companies that have knowledge of the facts and circumstances surrounding the APA, including but not limited to:
a. Damon Joyner
b. James Holbrook, Jr.
c. William Holbrook
Milton Turner – former board member of A&S, who has knowledge of the facts and circumstances surrounding the APA.
Don Newlin – former chairman of A&S (and current employee of Sterne Agee & Leach, Inc.), who has knowledge of the facts and circumstances surrounding the APA.
Todd Newton – former CEO of A&S, who may have knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.
George Nolde – former CEO of A&S, who may have knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.
Michelle Craft – former Chief Compliance Officer of A&S, who may have knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.
L. McCarthy Downs III – former employee of A&S, who has knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.
The Auditor (ACSB) in its initial preliminary disclosure, identified the following people and entities:
Joseph P. Acquavella - former managing partner of ACSB, may provide an overview of ACSB engagement with Tibet.
Mike Chan - former Auditor of ACSB
Santo Chiarelli - former partner at ACSB, may provide an overview of ACSB engagement with Tibet.
Bethanne Goens - former Supervisor/Manager at ACSB
Batsheva Granek - former Staff accountant at ACSB
Stanley Liang - former Auditor at ACSB
Smita Patel - former Auditor ACSB
Gene Rynkowski - former Supervisor/Manager at ACSB
David Svoboda - former Partner in charge of handling Chinese company audits at ACSB.
Gerry Tuch - former Quality Control at ACSB
Bei Wan - former Auditor at ACSB
Chris Wang - former Auditor at ACSB
Hayden Zou - Director of China Tibet
Hong Yu - Chairman of Tibet
Shuling Xie - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Gaoqing Ruan - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Ming Yu - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Benming Wang - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Xiuni Cai - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Zhene Chen - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Hongling Li - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Limin Sui - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Taylor Z.Guo - CEO, Tibet
Sabrina En - CFO, Tibet
Solomon Chen - Chairman of the Audit Committee of Tibet
L.McCarthy Downs III - former employee of A&S, who has knowledge relating to the underwriting process for the Tibet IPO.
Mr. Lewis McCarthy Downs III in his initial preliminary disclosure, identified the following people and entities:
Corporate representatives of Anderson & Strudwick (A&S) or its related companies who have knowledge relating to the issuance or underwriting and due diligence of the IPO of Tibet.
Former employees of A&S or its related companies that may have knowledge of the facts and circumstances surrounding Tibet, including but not limited to: Damon Joyner, Milton Turner, Don Newlin, Todd Newton, George Nolde, Michelle Craft, L.McCarthy Downs III.
Acquaelle, Chiarelli Schuster & Co. LLP, due dillgence of Tibet
Hayden Zou, Tibet IPO
Brad Hanneburg, underwriting counsel to A&S (formerly of Kaufman & Canoles P.C.)
Anthony Basch, Kaufman & Canoles, underwriter counsel
Anslow & Jaclin, LLP (law firm) due diligence
DeHeng Law Offices (Hong Kong/China), due diligence
Taylor Guo - CEO of Tibet
Hong Yu -COB and Director of Tibet
Sarina Ren - CFO of Tibet
Wenbo Chen - Director of Tibet
Youhang Peng - Director of Tibet
Solomon Chen - Director of Tibet
Trilogy Capital Partners - Investor Relations for Tibet.
Plaintiffs concerning the prices at which shares of tibet stock were purchased and any representations on which they claim to have relied.
On March 30, Defendants MUST fully respond to the Amended Complaint. The key information remains the safety and current location of the IPO Money, which can easily be verified through paper and digital trail from the Sun Trust Bank in Richmond Virginia where it was initially deposited to its current location.
March 24, 2015
The case was transferred last week from Judge Faith Hochberg to Judge Madeline Arleo (no reason was given). Judge Arleo has scheduled a telephone status conference on April 9 to discuss the status of the Case. The Defendants are expected to answer the Complaint on March 30th.April 14, 2015
On April 10, the Court issued a Pretrial Scheduling Order which included several ORDERs including the following:Fact discovery is to remain open through April 29, 2016.
Any unresolved discovery disputes (other than those that arise during depositions) must be brought before the Court no later than 6/12/2015.
The parties shall be limited to ten (10) depositions. No objections to questions posed at depositions shall be made other than as to lack of foundation, form or privilege.
The parties may serve interrogatories limited to twenty-five (25) single questions, aninitial requests for production of documents, as well as initial requests for admissions on or before 5/11/2015 to be responded to by 6/12/2015.
A telephone status conference shall be held before the undersigned on 11/6/2015 at 11:00A.M.
Since all dates set forth herein are established with the assistance and knowledge of counsel, there will be no extensions except for good cause shown and by leave of the Court, even with consent of all counsel.
Any motion to add new parties, whether by amended or third-party complaint, must be filed not later than 6/26/2015 and shall be made returnable on 7/20/2015.
Any motion to amend the pleadings must be filed not later than 6/26/2015 and shall be made returnable on 7/20/2015.
Any motion for class certification must be filed by 7/10/2015 and shall be made returnable on 8/3/2015.
All expert discovery shall be completed by 8/31/2016.
No expert shall testify at trial as to any opinions or base those opinions on fact not substantially disclosed in his or her report.
A final pretrial conference shall be conducted pursuant to Fed. R. Civ. P. 16(e) at a date and time to be assigned. Pursuant to paragraphs 14 and 15 of this Court’s form of Final Pretrial Order, all pretrial submissions must be served upon the Court forty-eight (48) hours prior to the final pretrial conference.
With respect to non-jury trials, each party shall submit to the District Judge and to opposing counsel proposed Findings of Fact and Conclusions of Law, trial briefs and any hypothetical questions to be put to an expert witness on direct examination.
The original of the Final Pretrial Order shall be delivered to Chambers not later than forty eight (48) hours before the pretrial conference, along with all pretrial submissions and trial briefs. All counsel are responsible for the timely submission of the Pretrial Order and submission.
FAILURE TO FOLLOW THIS ORDER WILL RESULT IN SANCTIONS PURSUANT TO Fed. R. Civ. P. 16(f) and Fed. R. Civ. P. 37.
s/ James B. Clark, III
JAMES B. CLARK, III
United States Magistrate Judge
May 8, 2015
The Court has again denied a second Motion to Dismiss the Case filed by the disgraced, unethical and reckless auditor Acquavella. This is the same Auditor that was banned by the USA Public Company Accountants Oversea Board (PCAOB).The disgraced and banned Auditor argued that a new Supreme Court Case (Omnicare v. Laborers District Council Construction Industry Pension Fund, 135 S.Ct. 1318 (2015) ) applied.IT IS on this 5th day of May, 2015 ORDERED that Defendant's request to file a motion for reconsideration is DENIED.
/S Madeline Cox Arleo
Hon. Madeline Xox Arleo
United States District Judge
May 24, 2015
A Bankruptcy Court in Richmond Virginia recently issued a decision against Sterne Agee and reconfirms the successor-in-liability decision based on its acquisition of all the assets of Anderson & Strudwick, similar to the one issued in the ongoing Class Action Lawsuit. Another company Stifel Financial Corp. recently acquired Sterne Agee and as such the liability is transferred to Stifel based on the successor-in-liability order.A local newspaper in Richmond Virginia published the news:
http://www.richmondbizsense.com/2015/04/27/years-later-lawsuits-and-debt-still-haunt-investment-firm-deal/
The Bankruptcy Case is in:
http://www.sacarbitration.com/SLAOnlineCases/2015_SLA/17/SLC_2015-17-06.pdf
Both the judges in Richmond and New Jersey have issued order holding Sterne Agee liable as a successor-in-liability. This is very good for TIBET victims as it further supports our Successor-in-liability argument against Sterne Agee. Interestingly, Mccarty Downs also filed a claim against Sterne Agee as a Successor-in-Liability. The United States Bankruptcy Judge's ruling indicate that the putative class in the Class Action lawsuit1 filed proof of claim in the amount of $21,591,945.21 on December 9, 2014 against Sterne Agee.
Stifel wants to buy Sterne Agee for $150 million. It is my understanding that Stifel has already been subpoenaed by ROSEN.
The Bankruptcy Court Case by the Court Appointed Trustee (Bruce E. Robinson) seems to be moving faster than the Class Action Lawsuit. This development is very postive for the victims of this scam.
These are some relevant sections of the Judge's Ruling:
The Counterclaim details that the Purchase Agreement and related documents and transfers constitute the transfers that are alleged to be fraudulent. The Counterclaim states the reasons the transfers are fraudulent, states that they were done with the intent to hinder, delay and defraud creditors, identifies the specified badges of fraud that support an inference of intent, and alleges that Sterne Agee actively participated in the fraudulent transfer and was on notice of the same.
The Trustee has standing to bring the successor liability claims against Sterne Agee because such claims constitute property of the bankruptcy estate. The Trustee has sufficiently alleged all necessary elements of his fraudulent transfer claim under 11 U.S.C. § 544(b) and Virginia Code § 55-80 and has pled sufficient facts to state a claim.
For the reasons set forth herein, Sterne Agee’s Motion to Dismiss is denied.
A separate order will issue.
Signed: April 8, 2015
/s/ Keith L. Phillips
United States Bankruptcy Judge
May 25, 2015
The Bankruptcy Court is moving the Case very fast. For online tracking of the Bankruptcy Case, go to the link below and search for either Sterne Agee Group or the Case Number: 3:14-ap-03175https://www.inforuptcy.com/filings/search-court-filings?search_field=party_title&search_term=Sterne*%20Agee*%20Group*&filed_from=&filed_to=
May 31, 2015
Sterne Agee filed a motion on May 27, 2015 seeking for the Bankruptcy Court to withdraw, sever, transfer and consolidate the case with the Class Action Case in New Jersey. The speed at which the Bankruptcy Case is moving must have baffled Sterne Agee. For the plaintiffs, having seen the speed with which the Bankruptcy Court had moved this Case to discovery, denying Sterne's current motion would be a good news. The Trustee Lawyer's response to this current motion by Sterne would be due soon and we await it.June 6, 2015
The Bankruptcy Trustee through his counsel filed a motion on June 5, 2015 seeking for the Bankruptcy Court to Compel Sterne Agee to Produce Documents Related To Stifel Financial's Purchase of Sterne Agee Group Inc's Asset on or before June 12, 2015,, and Motion to Expedite Hearing. The Trustee indicated that after several good faith attempts made to Stern Agee to provide the requested documents, the Trustee is seeking a Court Order to force Sterne Agee provide them including seeking a Court Order requiring Sterne to cover all the legal fees and expenses for filing the Motion. I like the speed of the Banktuptcy's proceedings and wished that the other Court in New Jersey would move at least half the speed.
June 8, 2015
The Bankruptcy Court's Judge issued an order today setting June 10 as the deadline for the Trustee to respond to the Motion of Withdrawal filed by Sterne Agee, and June 25 as the deadline for Sterne Agee to respond.
June 11, 2015
The Trustee's Counsel at the Bankruptcy Court filed a comprehensive response to Sterne Agee's motion to transfer the case to New Jersey so that it can drag on there for another five years. A trial date is set for October 5 -8, 2015 to decide the successor-liability Case.The state of Virginia also filed a claim against Sterne Agee based on outstanding tax liabilities owed by Anderson Strudwick from 1999 to 2010.
June 12, 2015
The Trustee filed a formal Notice of Bankruptcy at the New Jersey Court yesterday thereby triggering an Automatic Stay in all actions against the debtor Anderson & Strudwick. This is a positive development for TBET victims as it moves the Successor-Liability Case to the Bankruptcy Court which has proven to be more efficient and faster, and already has a firmed trial date set on October 5-8, 2015. Once the Trustee proves that Sterne Agee is liable,the claim of almost $21.5M filed by Rosen at the Court would be recovered from Sterne Agee as the successor-in-liability.With the Automatic Stay, the other Defendants in the New Jersey Case including the reckless Auditor ACSB , except Anderson & Strudwick and Sterne Agee would continue the litigation.
June 18, 2015
Sterne Agee is desperate and looking for all available technical options to stay the proceedings at the Bankruptcy Court or move it to New Jersey where it knows it would drag on for years. Unfortunately the Trustee and his legal counsels are up to the challenges. Today, the Bankruptcy Judge issued a Pre-Trial Order specifying the Trial schedule and reconfirming the Trial for October 5 - 8, 2015. The best thing to happen to Tibet's victims is for the Bankruptcy Court to find Sterne liable as successor of A&S. Already, the Judge's Memorandum of Opinion clearly indicated that the Trustee has standing to bring the lawsuit against Sterne, and the allegations in the counterclaim against Sterne is more serious as it clearly includes Fraudulent Conveyance with sole intent to defraud creditors. Once Sterne is found liable, the Court appointed Trustees would get full recovery of the almost $22 million claim.June 27, 2015
Sterne Agee brought new sets of lawyers from Alabama and filed another amended motion to sever the adversary proceeding and move it to New Jersey, notwithstanding that a trail date has being set already at the Bankruptcy Court. Instead of reaching out to the victims of this scam to seek settlement resolution, they are waging a legal battle they will never win because the badges of fraud against them on the fraudulent conveyance are compelling and backed by evidence as shown in the Judge's recent Memorandum of Opinion. The Trustee has to respond before July 9.July 3, 2015
The Trustee responded to Sterne Agee's Motion to Stay Adversary Proceeding and Continue Trail dates and indicated that both the Trustee and Sterne Agee's Counsels have agreed to a short continuance of the trial in the Adversary Proceeding in December 2015, and as such expects Sterne Agee to withdraw the motion. The Trustee reiterated that the stay is not necessary because the claims against A&S and Sterne are currently Stayed in New Jersey pursuant to the Bankruptcy Code's automatic stay in 11 U.S.C.s 362. Also, the Trustee stated that there is prejudice to the Trustee and the Debtor's estate if this Adversary Proceeding, including the discovery process, is stayed because it delays the timely resolution of the Debtor's Bankruptcy Case.
July 29, 2015
The two pictures below are the Google Earth Satellite images of what used to be Tibet's sole operating factory location in Shangri-la taken on May 7, 2012 and November 21, 2014. The 2012 picture clearly shows the buildings inside the facility. The 2014 picture shows a complete demolition of all the buildings with an empty lot remaining at the site. The facility also vanished from the face of the planet like the directors and management.
2012 Photo showing the buildings
2014 Photo showing empty land with all the buildings demolished and removed
August 1, 2015
The Plaintiff Lead Counsel Rosen filed the Motion for Class Certification on July 10, 2015 at both the Bankruptcy Court and the New Jersey Court. The Lead Plaintiffs would be undergoing deposition next month in New York in support of the Motion for Class Certification.
August 13, 2015
The deposition of the Lead Plaintiffs started today. Based on the money transfer records received from SunTrust Bank, we know the exact HSBC account number holding the entire IPO money. We still believe as stated in the Amended Consolidated Complaint that the entire IPO money is safe & fully controlled by Hayden Zou in the HSBC Bank in Hong Kong. We have a very STRONG Case and it is just only a matter of time for Justice to prevail. The Trustee and his Bankruptcy Lawyers will start the Successor Liability Trial against Sterne Agee in two months.
August 16, 2015
The Plaintiff deposition is going very well and will continue this week. I encourage all victims to remain hopeful and positive as we have high confidence that the IPO money is in the HSBC Bank in Hongkong under Zou`s control.
August 24, 2015
The Bankruptcy Court issued a notice today that the hearing on the Motion to Compel Production of Document Related to Stifel Financial's Purchase of Sterne Agee Group Inc's Assets filed by the Trustee's Counsel would continue on September 14, 2015.
August 28, 2015
The PCAOB disgraced and censured Auditor ACSB has evolved into another entity called ACS with almost the same staff and Principals. The former PCAOB disgraced and banned Principal Auditor Mr. David Svoboda (https://www.linkedin.com/pub/david-svoboda/20/326/34b) who was responsible for TBET's IPO Audit is no longer with the new entity ACS.
All the five Lead Plaintiffs have concluded their depositions today with full participation of the Auditor's counsel.
Following the completion of the plaintiff's deposition, the Lead Plaintiffs now look forward to the deposition of the Defendants in particular ACSB and David Svoboda towards understanding whether all the deficiencies described below by the PCAOB during David Svoboda's time at ACSB also applied to Tibet:
- the failure to perform sufficient audit procedures to evaluate whether goodwill was impaired;
- the failure to perform sufficient audit procedures to evaluate the accounting for a transfer of buildings and related land use rights;
- the failure to perform sufficient audit procedures to test revenue;
- the failure to perform sufficient audit procedures to test accounts receivable;
- the failure to perform sufficient audit procedures regarding warrants;
- the failure to perform sufficient audit procedures to test the valuation of stock-based compensation; and
- the failure to evaluate the effect of reported material weaknesses on the nature, timing, and extent of substantive procedures performed in the audit of the financial statements.
- the improper creation, addition, and backdating of audit documentation prior to a Board inspection; (b) directly and substantially contributed to a registered public accounting firm's violation of PCAOB quality control standards; and (c) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients.
- Outsourcing the audit to Chinese individuals with no formal training of PCAOB Auditing Standards.
As most of the former Principals of ACSB are almost the same principals of ACS, and with ACSB no longer operating as a business, there is a compelling reason to assign ACS as the successor of ACSB. Lead plaintiffs are fully aware of this development and would seek justice in holding ACSB and its successors fully accountable for its roles as the IPO Auditor and financial gatekeeper.
September 11, 2015
I am encouraging all the victims of this merciless and cruel crime to go to the SEC Whistleblower's Site to submit online complaints periodically about the false and misleading IPO Prospectus and $3 fictitious buy-out offer through:
https://www.sec.gov/about/offices/owb/owb-tips.shtml
September 27, 2015
Defendants through ACSB's Lawyer filed a letter on September 17 requesting for a one week extension of time, from September 18 to September 25, to serve its opposition papers to Plaintiff's Motion for Class Certification; Plaintiff consented and both parties agreed that Plaintiff's reply be extended from October 5 to 19, 2015.
Till date, after more than three and half years, Defendants have failed to disclose the current location or status of the $14.4 million net IPO proceeds transferred to HSBC Account in Hong Kong. They have not disclosed to the Court or the SEC that it was stolen or not. Mr Hayden Zou and Mr. Mac Downs who were the key IPO players and significant Board Controllng insiders (by being Senior Board Observers of TIBET) should do the right thing by disclosing the status of the $14.4 million.
September 29, 2015
Defendants filed approximately 280 pages document in Motion against Class Certification. Rosen has to respond before October 19, 2015.
The Bankruptcy Trustee and Lead Plaintiffs reached a settlement agreement for $14 million, and a Motion seeking approval of the settlement agreement was filed yesterday. This agreement if approved would release Anderson & Strudwick and Sterne Agee. The Bankrupty Court had previously issued a memorandum of Opinion that there are sufficient badges of fraud to hold Sterne Agee liable for the liabilities of Anderson and Strudwick.
October 5, 2015
The Bankruptcy Trustee claimed that it had reached an agreement with Sterne ($2.25 M) that would basically release Sterne and ban all future lawsuits against Sterne Agee. The settlement amount is significantly less than the $14 million agreement the Trustee reached with Rosen. After deduction of Trustee fees, Trustee's counsel's fees & expenses, Rosen legal fees and expenses, paying other claimants; the Tibet victims would be harmed forever with insignificant recovery from Sterne. Rosen will be objecting before the October 7 deadline..
October 6, 2015
Rosen and his legal team filed a 100 page objection today against the worthless and damaging agreement reached by this Trustee and Sterne Agee. Clearly, the Trustee's motion demonstrated that they lacked Securities Law experience and financial resources to litigate the case in a Trial. Rosen indicated he would provide necessary support in a Trial because Securities Law is their specialty. How the Trustee reached this worthless agreement without thinking about the consequences to the creditors is baffling. Sterne acquired Anderson and Strudwick leaving a shell bankrupt company with no asset to pay its debts. How the Trustee could not see the significance of this intentional fraudulent conveyance that the Judge had previously acknowledged that there were sufficient badges of fraud is damning.
November 21, 2015
HSBC must cooperate with the Court to disclose the current account statement of the IPO money in Hong Kong. We are optimistic that it is possible that the criminal CEO Hong Yu was not able to execute his fraud and remit the $14.4 million to mainland China as there is no money transfer evidence we have seen till date that he was successful.
December 02, 2015
Rosen has filed the Motion to Compel HSBC provide the monthly account statement from January 2011 till present. HSBC must respond before January 4, 2016.
December 21, 2015
HSBC filed a Motion today opposing the Motion to Compel. Rosen to respond on or before January 11, 2016. HSBC stated in their motion that they've already completed extensive searches of their global banking records associated with Tibet's Hong Kong bank account number and have provided the wire transfer records associated with the account number to Rosen. However, Rosen is seeking a more detailed account statement showing all transactions and bank statements from January 2011 till present which they are opposing.
2012 Photo showing the buildings |
2014 Photo showing empty land with all the buildings demolished and removed |
August 1, 2015
The Plaintiff Lead Counsel Rosen filed the Motion for Class Certification on July 10, 2015 at both the Bankruptcy Court and the New Jersey Court. The Lead Plaintiffs would be undergoing deposition next month in New York in support of the Motion for Class Certification.August 13, 2015
The deposition of the Lead Plaintiffs started today. Based on the money transfer records received from SunTrust Bank, we know the exact HSBC account number holding the entire IPO money. We still believe as stated in the Amended Consolidated Complaint that the entire IPO money is safe & fully controlled by Hayden Zou in the HSBC Bank in Hong Kong. We have a very STRONG Case and it is just only a matter of time for Justice to prevail. The Trustee and his Bankruptcy Lawyers will start the Successor Liability Trial against Sterne Agee in two months.August 16, 2015
The Plaintiff deposition is going very well and will continue this week. I encourage all victims to remain hopeful and positive as we have high confidence that the IPO money is in the HSBC Bank in Hongkong under Zou`s control.August 24, 2015
The Bankruptcy Court issued a notice today that the hearing on the Motion to Compel Production of Document Related to Stifel Financial's Purchase of Sterne Agee Group Inc's Assets filed by the Trustee's Counsel would continue on September 14, 2015.August 28, 2015
The PCAOB disgraced and censured Auditor ACSB has evolved into another entity called ACS with almost the same staff and Principals. The former PCAOB disgraced and banned Principal Auditor Mr. David Svoboda (https://www.linkedin.com/pub/david-svoboda/20/326/34b) who was responsible for TBET's IPO Audit is no longer with the new entity ACS.All the five Lead Plaintiffs have concluded their depositions today with full participation of the Auditor's counsel.
Following the completion of the plaintiff's deposition, the Lead Plaintiffs now look forward to the deposition of the Defendants in particular ACSB and David Svoboda towards understanding whether all the deficiencies described below by the PCAOB during David Svoboda's time at ACSB also applied to Tibet:
- the failure to perform sufficient audit procedures to evaluate whether goodwill was impaired;
- the failure to perform sufficient audit procedures to evaluate the accounting for a transfer of buildings and related land use rights;
- the failure to perform sufficient audit procedures to test revenue;
- the failure to perform sufficient audit procedures to test accounts receivable;
- the failure to perform sufficient audit procedures regarding warrants;
- the failure to perform sufficient audit procedures to test the valuation of stock-based compensation; and
- the failure to evaluate the effect of reported material weaknesses on the nature, timing, and extent of substantive procedures performed in the audit of the financial statements.
- the improper creation, addition, and backdating of audit documentation prior to a Board inspection; (b) directly and substantially contributed to a registered public accounting firm's violation of PCAOB quality control standards; and (c) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients.
- Outsourcing the audit to Chinese individuals with no formal training of PCAOB Auditing Standards.
As most of the former Principals of ACSB are almost the same principals of ACS, and with ACSB no longer operating as a business, there is a compelling reason to assign ACS as the successor of ACSB. Lead plaintiffs are fully aware of this development and would seek justice in holding ACSB and its successors fully accountable for its roles as the IPO Auditor and financial gatekeeper.
September 11, 2015
I am encouraging all the victims of this merciless and cruel crime to go to the SEC Whistleblower's Site to submit online complaints periodically about the false and misleading IPO Prospectus and $3 fictitious buy-out offer through:https://www.sec.gov/about/offices/owb/owb-tips.shtml
September 27, 2015
Defendants through ACSB's Lawyer filed a letter on September 17 requesting for a one week extension of time, from September 18 to September 25, to serve its opposition papers to Plaintiff's Motion for Class Certification; Plaintiff consented and both parties agreed that Plaintiff's reply be extended from October 5 to 19, 2015.Till date, after more than three and half years, Defendants have failed to disclose the current location or status of the $14.4 million net IPO proceeds transferred to HSBC Account in Hong Kong. They have not disclosed to the Court or the SEC that it was stolen or not. Mr Hayden Zou and Mr. Mac Downs who were the key IPO players and significant Board Controllng insiders (by being Senior Board Observers of TIBET) should do the right thing by disclosing the status of the $14.4 million.
September 29, 2015
Defendants filed approximately 280 pages document in Motion against Class Certification. Rosen has to respond before October 19, 2015.The Bankruptcy Trustee and Lead Plaintiffs reached a settlement agreement for $14 million, and a Motion seeking approval of the settlement agreement was filed yesterday. This agreement if approved would release Anderson & Strudwick and Sterne Agee. The Bankrupty Court had previously issued a memorandum of Opinion that there are sufficient badges of fraud to hold Sterne Agee liable for the liabilities of Anderson and Strudwick.
October 5, 2015
October 6, 2015
Rosen and his legal team filed a 100 page objection today against the worthless and damaging agreement reached by this Trustee and Sterne Agee. Clearly, the Trustee's motion demonstrated that they lacked Securities Law experience and financial resources to litigate the case in a Trial. Rosen indicated he would provide necessary support in a Trial because Securities Law is their specialty. How the Trustee reached this worthless agreement without thinking about the consequences to the creditors is baffling. Sterne acquired Anderson and Strudwick leaving a shell bankrupt company with no asset to pay its debts. How the Trustee could not see the significance of this intentional fraudulent conveyance that the Judge had previously acknowledged that there were sufficient badges of fraud is damning.November 21, 2015
HSBC must cooperate with the Court to disclose the current account statement of the IPO money in Hong Kong. We are optimistic that it is possible that the criminal CEO Hong Yu was not able to execute his fraud and remit the $14.4 million to mainland China as there is no money transfer evidence we have seen till date that he was successful.December 02, 2015
Rosen has filed the Motion to Compel HSBC provide the monthly account statement from January 2011 till present. HSBC must respond before January 4, 2016.
December 21, 2015
HSBC filed a Motion today opposing the Motion to Compel. Rosen to respond on or before January 11, 2016. HSBC stated in their motion that they've already completed extensive searches of their global banking records associated with Tibet's Hong Kong bank account number and have provided the wire transfer records associated with the account number to Rosen. However, Rosen is seeking a more detailed account statement showing all transactions and bank statements from January 2011 till present which they are opposing.July 14, 2016
Here are some sections of Mac Downs
deposition:
19 Q. What did you do in your capacity
as an
20 observer to Tibet's Board?
21 A. Nothing.
...
1 Q. So in Paragraph 27 it names
defendant --
2 on page 7 it names Defendant Hong
Yu. It says, Hong
3 Yu has been Tibet's chairman of the
Board of Directors
4 since April of 2011 and served as
Yunnan Tibetan's
5 chairman and CEO from 2000 to 2009.
6 Have you ever met Hong Yu?
7 A. I have not met Hong Yu.
8 Q. Have you ever spoken to Hong Yu?
9 A. I have not spoken to Hong Yu. I
10 understand he does not speak English.
11 Q. Okay. And Paragraph 28 names
Defendant
12 Sabrina Ren, who served as Tibet's
chief financial
13 officer since 2010. Have you ever
met Sabrina Ren?
14 A. I have not Sabrina Ren.
15 Q. Have you ever spoken with
Sabrina Ren?
16 A. No. She came on Board apparently
after
17 the visit that we had.
18 Q. Okay. Paragraph 29 names
Defendant Wenbo
19 Chen. Wenbo Chen has served as a
Tibet director since
20 April 2010.
21 Have you ever met Wenbo Chen?
22 A. I have not.
23 Q. Have you ever spoken to him?
24 A. I have not.
25 Q. And Paragraph 30 names Defendant
Youhang
Page 41
1 Peng. Defendant Youhang Peng has
served as Tibet
2 director since April 2010. Have you
ever met Youhang
3 Peng?
4 A. I have not.
5 Q. Have you ever spoken to him?
6 A. I seem to recall I made a
telephone call
7 to him sometime during the
transaction, but I don't
8 remember for certain if I got
through to him, but I
9 did attempt.
10 Q. Do you know if Peng's principal
place of
11 residence is in China?
12 A. I was told that Mr. Peng's
principal
13 place of residence was in Texas.
14 Q. Okay. Do you know if Peng has a
place of
15 residence in China at all?
16 A. I do not know that.
17 Q. Do you know if Peng is a U.S.
citizen?
18 A. I was under the belief that Peng
was a
19 U.S. citizen.
20 Q. Do you know if Peng files U.S.
tax
21 returns?
22 A. I do not know.
23 Q. In paragraph 31 it names
defendant
24 Solomon Chen. Defendant Solomon
Chen served as a
25 Tibet director since April of 2010.
Have you ever met
Page 42
1 Solomon Chen?
2 A. I have not.
3 Q. Have you ever spoken with him?
4 A. I have not.
5 Q. And so you stated that you met
Taylor
6 Guo?
7 A. Yes, ma'am.
8 Q. And you met Hayden Zou?
9 A. Yes, ma'am.
10 Q. Did you meet any of the other
directors
11 of Tibet?
12 A. I just answered that.
13 Q. Okay. But there's nobody else
who was a
14 director of Tibet that you met
with; is that correct?
15 A. That I personally met with, no,
ma'am.
These
are from the Zou’s deposition below :
7
Q. And these are China Tibetan
8
statements from January 2011 through August
9
2014.
10
When was this bank account opened?
11
A. I don't recall. Maybe sometime in
12
2000.
....
20
Q. Where did the money in this account
21 come from?
...
23
A. I really have no idea.
24
Q. So
you controlled this bank account
25 and you don't know where
the money came from?
....
14
Q. This account shows an opening
15
balance on February 12, 2011 which is at page
16
3. Total value of investment services
17
$32,614,233.79. That's also net position.
18
What does this balance reflect?
20
A. I don't have any idea.
21
Q. Then it looks like on August 13,
22
2014 which is at page 85, it says the net
23
position is 14,733.51.
24
So where was all the money in this
25 account moved to?
3 A. I really don't know.
Here, Sara was asking Zou
about the more than US$4.1 million (i.e., $32,614,233.79 Hong Kong dollars)that
was transferred on January 26, 2011 into the account Zou created in 2000 &
owns, and Zou blatantly denied not knowing where the money was moved to.
The remaining balance of the
transfers he did in Feb to May 2012 were intentionally not disclosed in the
bank statements he submitted to Rosen. We have requested for these missing bank
statements and we are yet to receive them from Rosen.
Also, we have asked Rosen to
inquire from Zou why $3,044,000 was moved to Damient Ltd and have not yet
received any response.
In addition to controlling most
of the IPO money, Zou also dumped all his 423,375 shares through insiders knowledge of
the scam in 2012. Not just dumping only his own shares, he sold all shares
controlled by his brother and his company Fulcan LLC.
These are important factual evidences of culpability.
These are continuations of Zou’s deposition :
2 Q. Do you see where it says, In
3 connection with this offering.
4 So it says, In connection with this
5 offering, we have agreed to allow our
6 placement agent to designate two nonvoting
7 observers to our board of directors until the
8 earlier of that date, that the investors that
9 purchased shares in this offering
10 beneficially own less than 5 percent of our
11 outstanding shares or the trading price is at
12 least four times the offering price for any
13 consecutive 15-day trading period.
14 Neither of those events ever
15 happened at Tibet, correct?
16 A. I don't know, the first one.
17 Q. I will represent it didn't.
18 Then it says, Although our
19 placement agents observers will not be able
20 to vote, they may nevertheless significantly
21 influence the outcome of matters submitted to
22 the board of directors for approval. We have
23 agreed to reimburse the observers for their
24 expenses for attending our board meetings
25 subject to a maximum reimbursement of $6000
...
2 per meeting and $12,000 annually, which
3 amount is not more than the reimbursement
4 payable to our directors. The observer will
5 be required to certify that such travel
6 expenses are not reimbursed to any other
7 party. We will also pay observers the same
8 amount as our independent directors receive.
9 As of the date of this prospectus, Mr. L
10 McCarthy Downs III and Mr. Hayden Zou are
11 serving as placement agent's observers to our
12 board of directors.
13 The placement agent is Anderson &
14 Strudwick, correct?
15 A. Yes.
16 Q. So why did Anderson & Strudwick
17 designate two observers to the board of
18 directors?
..
20 A. I don't have any idea why.
21 Q. So why were you designated as an
22 observer to the board of directors?
...
24 A. I really don't know. It's a
25 mistake.
...
2 Q. It's a mistake?
3 A. I am in this case right now, I
4 think it's a mistake.
5 Q. Did you consent to your being
6 designated as an observer?
7 A. It must be so.
8 Q. But do you recall having consented?
9 A. I don't recall but my name is
10 there.
11 Q. Do you know who made the decision
12 to designate you as an observer?
13 A. I don't recall but if my name is
14 there, I assume it must get my consent.
...
16 Both of us want you to tell for the
17 record what you remember.
18 Q. So you participated in
19 incorporating the company and you
20 incorporated a company previously. And you
21 are familiar with the process of public
22 offerings in the United States, is that
23 correct?
24 A. Somewhat familiar yeah.
25 Q. And you did not read the
...
2 prospectus?
3 A. It's normally 100, 200 pages
4 prospectus, so normally I don't read it.
5 Q. And did you know that your name was
6 in the prospectus?
7 A. Yes, for being an observer, I must
8 know my name is there.
9 Q. What does an observer do?
10 A. I really don't have any idea. It's
11 just observing the board.
12 Q. But it says that you can exert
13 significant influence over the board?
14 A. I mean, what influence can an
15 observer give to the board, you are just an
16 observer. You held no voting rights, you
17 cannot vote, you cannot veto, so it's just an
18 observer.
19 Q. Why was McCarthy Downs designated
20 as an observer?
22 A. I don't have any idea.
23 Q. And did Tibet's board members speak
24 with you about being designated as an
25 observer?
2 A. No.
3 Q. Prior to the IPO, did you have any
4 conversations with Tibet's CEO and other
5 board members?
...
8 Q. Did you have any conversations with
9 the CEO prior to the IPO?
10 A. Yes.
11 Q. What was discussed during those
12 conversations?
13 A. I don't remember, I don't recall.
14 Q. So you helped incorporate this
15 company but you didn't know that you would
16 have any responsibilities in connection with
17 the IPO?
...
19 A. I always believe I had no
20 responsibilities to the IPO.
21 Q. So if these observers couldn't
22 vote, what was the purpose of having the
23 observers?
25 A. I have no idea.
...
2 Q. It says that you are able to
3 influence matters that are submitted to the
4 board of directors.
5 What matters did you influence?
6 A. I never seen -- I have never seen
7 any matters shown to me so I don't know if
8 there is any matter submitted to the board or
9 not.
10 Q. So do you know if Tibet had any
11 board meetings?
12 A. I don't remember if they have any
13 meeting.
14 Q. Did you find it strange that Tibet
15 didn't have any board meetings?
16 A. I don't know. It's their business
17 decision, it's not mine.
18 Q. So you invested money in this
19 company and you weren't concerned about the
20 board's behavior and operations?
21 A. Of course you invest your own
22 money, you are concerned, that's true, you
23 are concerned, but board meeting, I don't
24 know, is that going to make a difference.
25 Q. So you think that a public company
2 that runs without having any board meetings,
3 that's not something that concerns you, as
4 somebody experienced in equities as you
5 testified, and investing?
7 A. I just didn't follow that closely,
8 where I never pay attention to them whether
9 they have a board meeting or not.
10 Q. How much money did you invest in
11 Tibet, I know it's in the prospectus?
12 A. We invest close to 200,000.
13 Q. And you invested that money with
14 Philip Zou, correct?
15 A. I'm just talking about my part.
...
3 Q. Did you think that U.S. investors
4 would be more likely to invest in a company
5 that had someone like McCarthy Downs as an
6 observer on the board?
7 MR. GUNNELL: Objection.
8 A. I don't know.
9 Q. But you wanted this IPO to be
10 successful, correct?
11 A. Well, I invest my money, so of
12 course.
13 Q. Who decided you should be
14 reimbursed $12,000 annually for your service
15 on the board?
17 A. I have no idea. I didn't
18 participate in the decision.
19 Q. Do you know why this amount was the
20 same as directors would be reimbursed if you
21 were just an observer?
22 A. No, I really never pay attention to
23 it.
24 Q. Were you concerned that your role
25 as an observer could subject you to the same
3 MR. GUNNELL: Objection. Calls for
4 a legal conclusion.
5 A. I just didn't know the liability of
6 being an officer, otherwise I won't either, I
7 won't allow to put my name there.
8 Q. Were you paid anything in
9 connection with being an observer?
10 A. No.
11 Q. You were never compensated?
12 A. I never receive compensation.
13 Q. Did you ever resign from the board
14 as an observer?
15 A. No, I didn't know I need to resign.
16 Q. So you never resigned?
17 A. Yeah, I didn't know I need to
18 resign from as an observer.
19 Q. Do you know if McCarthy Downs ever
20 resigned?
21 A. I don't know either.
July 15, 2016
The
following names and addresses of individuals and entities associated with Tibet were published in the leaked Panama Papers below:(Click on image to expand)
Downs and Zou filed their motions for summary judgement on June 30, 2016.
- There is nothing in their recent Motion that frees them from the fact that they failed miserably as Board Observers. How two men that claimed to be very experienced in IPO would serve as Board Observers and play a significant role in the IPO without ever MEETING OR TALKING to any of the Board of Directors from 2009 to 2012 is inexplicable and incomprehensible.
- How Mac Downs and Hayden Zou as Board Observes would not care to verify whether Tibet was a Phantom company with inactive board is mind boggling even in the midst of all the red flags they had described or suspected before the IPO in their filings including red flags about Tibet’s outstanding bank debts.
- Mr Hayden Zou in his Deposition indicated that he opened the Hong Kong account in 2000 but could not explain where the $4.1 million deposited in his China Tibetan account came from and where the money went to.
- Zou’s failure to account for the $4.1 million deposited into his China Tibetan Account including failure to disclose the account statements for Feb to May 2012 period demonstrates that Zou still controls at least $4.1 million of the IPO money.
- Zou also intentionally refused to disclose China Tibetan's bank statements from February to May 2012 that would further prove that he transferred the remaining balance of the IPO money to his China Tibetan Account. Till date, after repeated request, Zou refused to disclose these missing bank statements.
- Zou refused to disclose why more than $3 million was wired to Damient on Jan 26, 2011, two days after the IPO.
- What is so incriminating and damning is that while Zou could not perform his role as a Board Observe nor cared to meet or talk to Tibet directors even when the auction was disclosed in February 2012 , it never stopped Zou from quickly dumping all his 424,375 shares to the unsuspecting public thereby further proving the ruthlessness, bad faith act, negligence and cruelty of Zou.
- Zou’s quick dumping of his shares while refusing to meet or talk to the directors in the midst of the auction deserves punishment. It demonstrates gross negligence and bad faith act that was intentional. Zou as a Board Observer quickly ran to cash-out his shares while blatantly refusing to perform his role as a Board Observer including meeting and talking to Tibet directors about the auction.
- Mac Downs visited China but stated he never met any director of Tibet. Nothing in Down’s filings showed that he met or talked to any of Tibet’s directors before and after the IPO nor performed his role as a Board Observer between 2009 and 2012. There is no question to the indisputable fact that the IPO Prospectus clearly stated that Mac Downs would significantly influence matters submitted to Tibet Board. This was a factual statement in the IPO prospectus that was comforting to many USA investors including the plaintiffs. Down’s failure to either perform his role or meet or talk to any of the directors demonstrates gross negligence and bad faith act that are not expected from an Investment Banker with more than 30 years of experience. Downs culpability deserves Punitive measures against him as Down’s demonstrated beyond reasonable doubt that the Board Observer’s role was a sham and nothing but a deceptive tactics used to lure the unsuspecting public from purchasing shares of Tibet as both Downs and Zou did nothing as Board Observers. If Downs or Zou had either met or talked to any of the Directors, they would had realized that Tibet was a phantom bankrupt corporation with inactive board.
July 24, 2016
Here are Donald Trump's videos about the American Rigged System.https://www.youtube.com/watch?v=auviMog1zNI
https://www.youtube.com/watch?v=TExdmFEETPQ
Anyone who had passed through and witnessed this corrupt system would understand the truth Donald Trump is saying about how rigged the system is against the citizens. When a USA Law Court dismissed compelling HSBC from disclosing the IPO Bank Account holding funds belonging to innocent American citizens who were victims of fraud, it is the climax of a rigged corrupt broken system. A system that encourages frauds in the securities exchange. A system that the Securities Laws are designed to protect the criminals with no consequences for the Pains and Sufferings caused to innocent victims. A system that the Securities enforcement agency called SEC is simply useless. Totally rigged!!! Thank you Donald Trump for speaking about it many times. I am a witness to this rigged system.
September 3, 2016
Here are some of recent events:
- Youhang Peng filed motion to dismiss.
- Downs and Zou filed Motion for summary Judgement seeking dismissal.
- Rosen filed a detailed and comprehensive responses to Downs and Zou's Motion for Summary Judgement opposing dismissal and seeking Jury Trial.
- Rosen applied to the Court to expedite the approval of the $2,075,000 settlement with ACSB.
- Sterne Agee's settlement with the Trustee is still pending finalization!!
After numerous complaints submitted to the SEC and FINRA by several of the victims, these USA Agencies have failed till date to commence any proceedings against the people and entities behind this brazen and malicious IPO fraud including the fictitious buy out offer, and to hold them accountable for their actions.
November 26, 2016
The Judge issued an order on Nov. 18 requesting for additional clarifications on ACSB's settlement. Rosen has 21 days to respond. These are some pending events:- Awaiting Court Order on Peng's Motion to Dismiss
- Awaiting Court Order on Downs and Zou's Motion for Summary Judgement
- Awaiting Court Order on Rosen's Motion to access Tibet IPO Hong Kong Bank Account through Hague Convention process.
- Awaiting processing of Sterne Agee Settlement.
The Case is now nearing 5 years and the following are now clear:
- Approximately $3.1 million was transferred two days after the IPO on Jan 26, 2011 to an account owned by an entity called Damient Limited.
- Zou & Downs never met with Tibet's Directors per their court filings till date except meeting with Yu Hong and Taylor Guo. All their filings till date indicates that they never met the Chinese Directors even when they went to China which can effectively prove that either these Chinese Directors were fictitious characters created from Thin Air or that Zou and Downs for some reckless reasons could not see it to be abnormal to register the IPO of a Chinese Company for USA Citizens to invest without ever talking to or meeting any of the so called Chinese Directors.
- While Zou could not perform his Board Observer role or meet with the Directors, it did not stop him from dumping his shares and never filed any SEC disclosures for such shares transaction even though he was an insider of Tibet.
- Zou has refused to provide the bank account statement of China Tibetan for the critical periods of February to May 2012. Plaintiffs believe that these missing bank statements would shed more light into the money transfers that took place after the fraud was exposed on Feb 17, 2012. Zou provided other bank statements but intentionally withheld the bank statements for these missing critical months in 2012.
Jan 1, 2017
The Judge issued an Order on Dec 29, 2016 approving the $2,075,000 settlement with the Auditor ACSB. Class Members in the Sterne Agee settlement would be automatically included in this settlement unless they opted out. As Strategic Claim Services already have a comprehensive claimants database, it is expected that this claim processing would be faster and more efficient.Jan 18, 2017
The Judge issued an Order approving the Request for Letters Rogatory that would enable HongKong Court provide judicial assistance to Rosen regarding the account statements from HSBC HongKong.April 19, 2017
After almost 5 years in this fraudulent mess, the Judge issued an Order dismissing the civil case against Youhang Peng, without prejudice. Youhang Peng was a member of Tibet's Audit Committee and received financial payment from Tibet as was disclosed in the HSBC Wire Transfer Statements. Youhang Peng also served as Director of Tibet and currently resides in USA. Youhang Peng claimed that he was not properly served by Rosen, and as such the Judge decided not to hold him accountable for this cruel crime due to a technical jargon called status of limitation. Plaintiffs are evaluating their options as at this time. Youhang Peng is the only remaining defendant who can tell the victims what happened to the $16 million raised in the IPO as both Mac Downs and Hayden Zou, ACSB & Sterne Agree had declined to provide the answer.April 20, 2017
As all the Directors, officers and management staff of Tibet had absconded or resigned over the past years, and are no longer serving the company, some of the existing shareholders are considering the following future plans in order to revamp the company:
- Plan to organize a shareholder meeting to appoint new Management and Directors.
- Plan a new business focus for the company. One sector currently on top of the plan is the Marijuana Sector. The new business would focus on exploring opportunities in the revolutionary Marijuana Sector in USA and Canada. For USA, the focus would be in states where Marijuana is legalized. Canada is legalizing the recreational use of Marijuana in July 2018. The new company would look at growing through acquisition of existing licensed or pre-licensed private companies in USA and Canada, dispensaries and retail outlets.
- Plan a new business name for the company. Right now, several names are being considered and the one on top of the list is Global Marijuana Growers Inc.
- Plan to obtain a new Stock symbol for the new Company.
- Plan to regain annual and quarterly reporting status with the SEC including meeting all compliance requirements that will eventually lead to an upgrade in the exchange listing.
May 10, 2017
The Judge issued an order today denying Downs & Zou's Motion for Summary Judgement with regards to Section 11 and due diligence liabilities. Plaintiffs are happy with this Order as they look forward & prepare for trial. The trial schedule will be announced when completed by the Court.
THE ONLY THING NECESSARY FOR THE TRIUMPH OF EVIL IS FOR GOOD MEN TO DO NOTHING
Summary of Key Events and Timelines:
January 18, 2010: Agricultural Bank of China filed a law suit against TIBET's main operating entity in China YSTP for the repayment of three long overdue loans which were all secured by the entire assets of YSTP.
July 20, 2010: A trial was held and YSTP made no court appearance.
September 10, 2010: The court entered a judgement ordering YSTP to pay Agricultural Bank of China around $4.5 million in principals and interest within 60 days. Interestingly, during this period, TIBET' SEC Prospectus Registration process was going on.
January 10, 2011: YSTP failed to pay the loans. The court on this day issued an Enforcement Order freezing all the assets of YSTP. This material event was never disclosed anywhere in the IPO prospectus. All these court events were occurring at the same time that the IPO Registration was happening with the SEC.
January 18, 2011: TIBET issued its IPO Prospectus and accepted by the SEC.
January 24, 2011: IPO money $14.4 million deposited in HongKong account
January 26 2011: $3.044 million wired to Damien
January 26, 2011: $4.1 million transferred to China Tibetan controlled by Hayden Zou.
January 28, 2011: TIBET started trading in NASDAQ.
June 6, 2011: Mr. Taylor Guo was terminated abruptly as CEO but remained as Director. This happened approximately 4 months & 1 week after IPO started trading in NASDAQ.
September 12, 2011: Auditor resigned abruptly and offered no adverse opinion on past auditing work.
October 11, 2011: Sherb & Co appointed as new Auditor.
November 15, 2011: Third quarter earnings conference call. TIBET indicated they have not yet utilized the IPO money as they were evaluating an acquisition target. The last 10Q quarterly report for period ending September 30, 2011 shows that the IPO money is still in the Cash section of the Balance Sheet.
February 17, 2012: Auction site announced auctioning of TIBET assets in China.
February 27, 2012: Having realized the game is about to end, the criminal CEO Yu Hong immediately announced a fictitious go-private offer and said the company would investigate the auction. No investigation was ever completed by the directors. The company went dark from this date and stopped communicating with regulators and shareholders.
March 30, 2012: TIBET failed to file the audited 10K annual report for 2011.
April 3, 2012: Stock halted by NASDAQ. Additional information requested by NASDAQ.
April 5, 2012: ROSEN Law firm announces that it would start investigation of TIBET.
April 27, 2012: Having failed to respond to NASDAQ, stock was delisted from NASDAQ.
May 25, 2012: Class Action Lawsuit Complaint filed in Virgin Island Court. TIBET's Directors and Officers were properly served and summoned by the court alongside other defendants. Till date, the past and present CEOs Yu Hong and Taylor Guo, CFO and Directors have refused to respond to the Court summon and complaint.
July 4, 2013: Hayden Zou, one of the IPO Underwriter Agents and TIBET's Board Observer submitted a sworn affidavit to the USA Virgin Island Court stating that "to the best of his knowledge, TIBET Directors never held a Board Meeting". Incredible & mind boggling!!!!
November 21, 2013: The USA Public Company Accounting Oversight Board (PCAOB) fined, censured and barred TIBET's IPO Auditor for reckless and negligent auditing practices for other three Chinese companies based on the Board's inspections completed in 2009 and 2010, the same time period that the disgraced Auditor was auditing Tibet. Tibet's IPO Auditor was barred for two years by the PCAOB. Additionally, a former partner of the firm David Svoboda was barred for three years by the PCAOB for intentional unethical acts of creating and backdating audit documentations before the Board's inspections thereby failing to act independent of the issuer as required in the Auditing Standards. In other words, instead of acting as the independent financial gatekeepers of these public Chinese companies, they were intentionally creating and backdating audit documentations to aid these Chinese companies evade scrutiny.
May 1, 2014: Judge issued an Order Denying Defendants Motion to Dismiss. The Case is transferred to the District Court of New Jersey as requested by all parties.
June 6, 2014: Case assigned to Judge Faith S. Hochberg and Magistrate Judge Michael A. Hammer.
June 19, 2014: Court approved defendants request to extend time to respond to the amended consolidated complaint from June 17 to July 7, 2014.
July 7, 2014: Defendants filed motion to dismiss.
August 18, 2014: Plaintiff responded to Defendants motion to dismiss
September 3, 2014: Defendants filed their last responses.
October 27, 2014: Court kept discovery schedule on hold pending outcome of Motion to Dismiss.
February 20, 2015: Court denied Defendants Motion to dismiss
March 12, 2015: Defendants issued initial disclosures, Hayden Zoe did not.
March 17, 2015: Case transferred from Judge Hochberg to Judge Arleo.
March 30, 2015: Defendants issued response, Hayden Zou did not.
April 8, 2015: Virginia Bankruptcy Court denies Sterne Agee motion to dismiss.
April 10, 2015: Pretrial schedule issued by Magistrate Judge
May 1, 2015: Hayden Zou filed initial disclosures and response.
May 5, 2015: District Judge Arleo denied Acquavella's Motion to Reconsider Dismissal.
July 10, 2015: Rosen filed Motion for Class Certification
August 13, 2015: Deposition of Lead Plaintiffs by Defense Counsel commence
August 28, 2015: Plaintiff's deposition concluded
October 5, 2015: Trustee reached agreement with Sterne Agee,
December 29, 2016: Judge approved ACSB $2,075,000 settlement.
May 10, 2017: Judge denies Downs & Zou summary judgement on Section 11 liability.
OLD Comments
http://www.reuters.com/article/2013/05/24/us-usa-auditing-china-idUSBRE94N0VO20130524
We had all ready contact through email i send you another mail.
Greetings,
As long as there is no prove its fraud there is hope.Remember the last sec.filling.Hoping for some update from the court.
Have to wait until the class action is over just like HQSM.
I'm not american and I'm not familiar with class action.
One year ago, I've gave my information to Rosen Law (number of share,...).
Can I take part of the Class Action ?
Thx
Previously I was upset with NASD for the way they handled the delisting. Now I am incensed at their handling of the IPO and delisting.
Mel
Absolutely agree
Val - Bulgaria
Note that it is @yahoo.ca and not .com.
Does anyone else think this might be a reasonable possibility?
As a matter of fact, I rarely partake in eggrolls anymore.
BVI corporation law has provided guidance as to when minority shareholders can apply to the court to dissolve a corporation:
• The company is unable to function due to deadlock in the management;
• The shareholders have lost confidence in the directors’ ability to manage the company’s affairs due to a lack of probity or fair conduct on the directors’ behalf22;
• The company cannot function in accordance with the purpose for which it was created (it has lost its substratum’)23;
• The directors have breached their fiduciary duties;
• There has been misappropriation of the company’s assets. Mere suspicion of misappropriation is not enough, there must be cogent evidence to prove it has occurred;
It may be a good idea that TBET shareholders ask court to appoint a receiver to get the IPO money in Hongkong and return the money to all the shareholders. For more information please search google with the following sentence:
British Virgin Islands: Guiding You Through... Shareholder Rights In The British Virgin Islands pdf
any updates on this issue? Any news will be greatly appreciated. Thanks for all your efforts and hard work. Hope we get these crooks.
As a victim in this fraud case, obviously I know first hand it's not "fun & excitement" for the victims, but it's also the most interesting part for us because this is when CEO Mr. Yu Hong and his army of minions will get caught red handed for submitting a bogus buyout offer.
Hope this helps!
Only when justice prevails and the stolen money gets fully reimbursed. No one should be ripped off, especially the way this theft went down by these criminals.
Why is the SEC so quiet during all of this?
Why it is possible to trade this stock today annymore?
Any idea how long ROSEN will take to file the Plaintiffs’ Memorandum in Opposition to Motion to Dismiss?
With all that's going on right now in the NJ courts, I'm seeing a repeat of what happened between June-August 2013 in the Virgin Island courts. I'm sure all of this is just a tactic the defense is using to delay having to respond to the charges posed against them.
It's frustrating to experience how slow the court systems work, but if this leads to justice prevailing, I'm all for being patient. Hoping for the best!
A schedule is in place, several weeks.
Pharmaceutical Manufacturers
Do you think Rosen will be able to get any money out of the two auditors for this case? How deep are their pockets (auditors)?
Gary R
thanks.
As for the "when": there is no timeline. Unfortunately for plaintiffs, the Court will make a ruling when it is ready, although given the long delay here, one would hope the Court rules soon.
Any idea when the estimated date for the trial will be?
Any idea how long it will take for the timeline to be set by the court for the discovery and trial (if the defendants choose to take this to trial)? Hopefully it's not as long as it took for the court to rule on the defendants motion to dismiss.
we are in the process of appointing Robert Seiden's firm to collect on a court judgment in China on behalf of QXM shareholders. If any one here lost money on QXM please contact me --gladpick@yahoo.com. If we are successful we could also use the experience to help us collect from the TBET criminals.
EIOM - do you happen to know what are we waiting on now? What can we do now that Hayden Zou didn't provide a response? When the discovery schedule commence/the process of trying to locate the IPO funds begin?
Confused as to what is going on in the courts right how. Any clarification would be helpful.
Thank you kindly,
~ Im2bz2p345 :)
Any update about the telephone conference scheduled on April 9 to discuss the status of the Case?
Thank you so much
Thanks for your continuous updates EIOM! :) These are very exciting times for all of us victims so I hope you can keep us up to date on what is going on.
Those people must be put in jail.
No one provide responce so far where dissapeared 14 million usd investors money. The law system in USA is pure crap !!!! You can not trust anyone in this country.
So what ever happened to the defendants (particularly Hayden Zoy & Mac Downs) not disclosing the current location or status of the $14.4 million net IPO proceeds transferred to HSBC Account in Hong Kong. Why hasn't the court pressured them into revealing this information?
further litigation.
further litigation.
I received a recent e-mail with the subject line: "Anderson & Strudwick Litigation - Tibet Pharmaceuticals, Inc." I am wondering what others are doing. Is this for the settlement of $2.25 million and was that the final order by the judge was?
Here is the body of the e-mail:
"Your email address was provided to us by Class Counsel.
Attached is the Notice and Claim Form for the above referenced litigation. In order to be eligible to participate in the settlement, you must fill out the claim form and mail it with supporting documentation postmarked no later than January 11, 2016 to: Anderson & Strudwick Litigation, c/o Strategic Claims Services, 600 N. Jackson Street, Suite 3, Media, PA 19063.
If you have any questions, please contact us.
Regards,
Claims Administrator
Strategic Claims Services
600 N. Jackson St.
Media PA 19063
Phone: 610-565-9202
Fax: 610-565-7985
Toll Free: 1-866-274-4004"
Attached was a claim notice PDF.
Can you advice as to what we (as the plaintiff's in the case/class) should be doing? Do we sign the claim notice & send it in? Do we have any alternate option at this point? You mention in your recent update that "Our focus now is on the three other Defendants in the New Jersey Court." From what I'm reading, if we sign & turn in the claim notice to accept the settlement amount, we give up to pursue this any further.
Is the best thing to do for us to continue fighting this listed in question#14 on the claim notice FAQ? It states:
"14. How do I tell the Court that I do not like the Settlement?
You can tell the Court you do not agree with the Settlement, any part of the Settlement, or Class Counsel’s motion for attorneys’ fees, and that you think the Court should not approve the Settlement, by mailing a letter stating that you object to the Settlement in the matter of Dartell v. Bruce E. Robinson, Trustee and Anderson & Strudwick, Inc., Bankruptcy Case No. 14-32679, Adv. Pro. No. 15-03384. Be sure to include your name, address, telephone number, your signature, a list of your purchases and sales of Tibet Stock in order to show your membership in the Class, and all of the reasons you object to the Settlement. It must also state all your grounds for the objection, including any legal support known to you or your counsel, the name, address, and telephone number of all counsel who represent you, including former or current counsel who may be entitled to compensation in connection with the objection, a statement confirming whether your counsel plans to appear at the Settlement Hearing along with their name, address, and telephone number, and the number of times you filed an objection in the previous five years and the nature of each objection to each case in which you filed an objection in the previous five years. Be sure to mail the objections to the three different places listed below, postmarked no later than JANUARY 15, 2016 so the Court will consider your views:"
If we simply accept this settlement, it sounds like this is only going to be pennies going back to the shareholders. This is my first time being involved in such a lawsuit, so please forgive me if my questions are rather basic. Hope you can help myself and others.
click on: Anderson & Strudwick Litigation on top right corner
The information contained in the settlement document indicates that the "debtor estate has $89,1010.49 in it." It also indicates Sterne Agee & Leach, Inc. will "pay $2.25M." However, the document is silent as to who is paying the remaining monies up to the $14 M. Does anyone have any idea about this missing information?
Since our (plaintiff) trustee was garbage, will it now be Rosen vs the 3 defendants?
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