Frequently Asked Questions
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BASIC INFORMATION
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Why did I receive this notice package?
You or someone in your family may have purchased or acquired Fuqi common stock between May 15, 2009 and March 27, 2011, and/or purchased or acquired Fuqi common stock pursuant to or traceable to the Secondary Offering on or about July 22, 2009. You have a right to know about a proposed Settlement of a class action lawsuit, and about all of your options, before the Court decides whether to approve the Settlement. If the Court approves the Settlement and after any objections or appeals are resolved, the Claims Administrator appointed by the Court will make the payments to those persons who timely submit claims in the manner described below.
This page explains the lawsuit, the Settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.
The Court in charge of the case is the United States District Court for the Southern District of New York, and the case is known as In re Fuqi International, Inc. Securities Litigation, Civil Action No. 10 Civ. 2515 (DAB). Puerto Rico Government Employees and Judiciary Retirement Systems Administration, Craig B. Laub, J.D. Pisut, and Sandra Redfern, who brought this action, are called Lead Plaintiffs, and the companies and individuals they sued, Fuqi, Yu Kwai Chong, Ching Wan Wong, Lie Xi Zhuang, Lily Lee Chen, Eileen B. Brody, Victor A. Hollander, Jeff Haiyong Liu, William Blair & Co., Oppenheimer & Co. Inc., and Cowen and Company, LLC, are collectively called the Defendants. The Parties include Lead Plaintiffs and the Defendants.
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What is this case about?
This Action alleges violations of the Federal Securities Laws (specifically, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Section 11 of the Securities Act of 1933) against Defendants.
Fuqi was a publicly traded company based in China. Fuqi is a designer of high quality precious metal jewelry and deals in developing, promoting, and selling a broad range of products to the luxury goods market in China. During the Class Period, Fuqi common stock traded on the Nasdaq Stock Market under the ticker symbol “FUQI.”
The Plaintiffs allege that, during the Class Period, Fuqi’s stock price was artificially inflated as a result of untrue or materially misleading statements concerning the Company’s financial results. Plaintiffs further contend that Defendants made these statements knowing them to be false or misleading, or recklessly disregarding their false or misleading natures, and that investors suffered damages as a result of the alleged inflation in Fuqi’s stock price. In addition, Plaintiffs allege that Fuqi’s CEO approved certain improper cash transfers to third parties, which were not timely disclosed.
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Why is this a class action?
Class actions are generally used in lawsuits that affect a large number of individuals; in effect, the class action operates to consolidate into a single action all of the claims of individuals allegedly harmed by the same conduct or course of conduct, thus alleviating the need for members of the class to file their own individual lawsuits to recover for the harm alleged. Once the class is certified, the Court is empowered to resolve all issues on behalf of members of the class, except for those members of the class, if any, who specifically choose to exclude themselves from the class.
All Class Period purchasers of Fuqi common stock are Class Members, except those persons who timely file a request for exclusion postmarked by January 29, 2015. All persons who do not timely exclude themselves from the Class will be bound by the proposed Settlement and its accompanying Release.
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Why is there a Settlement?
The Court did not decide in favor of Plaintiffs or Defendants. Instead, both sides agreed to a Settlement after conducting mediation. This permits them to avoid the cost and uncertainty of a trial, and permits eligible Class Members who submit valid claims to receive compensation. The Lead Plaintiffs and their attorneys believe the Settlement is best for all Class Members, and even if they succeeded at trial avoids the issue of the collectability of a judgment. The Defendants have concluded that further defense of the Action would be protracted and expensive, and also have taken into account the uncertainty, risks and distractions inherent in any litigation, especially in a complex case such as the Action.
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WHO IS IN THE SETTLEMENT
To see if you will receive money from this Settlement, you first have to determine if you are a Class Member.
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How do I know if I am part of the Settlement?
The Class includes all persons or entities who purchased or acquired shares of Fuqi common stock between May 15, 2009 and March 27, 2011, inclusive, and/or purchased or acquired Fuqi common stock pursuant to or traceable to the Secondary Offering on or about July 22, 2009.
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What are exceptions to being included?
You are not a Class Member if you are a Defendant, an officer or director of Fuqi, members of their immediate families, any entity in which any Defendant has or had a legal controlling interest, and the legal representatives, heirs, successors or assigns of any of the foregoing.
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I'm still not sure if I am included.
If you are still not sure whether you are included, you can ask for free help. You can call the Claims Administrator at 877-351-0335 or Abraham, Fruchter & Twersky, LLP at 212-279-5050 for more information. Or you can fill out and return the claim form downloadable at right to see if you qualify.
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THE SETTLEMENT BENEFITS — WHAT YOU GET
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What does the Settlement provide?
The Settlement will result in a fund of $7.5 million in cash. The balance of this fund after payment of Court-approved attorneys’ fees and expenses, any awards to Lead Plaintiffs, and the costs of claims administration, including the costs of printing and mailing this Notice and the cost of publishing the newspaper notice, and taxes (the “Net Settlement Fund”) will be divided, pursuant to the Plan of Allocation described below, among all eligible Class Members who send in valid claim forms.
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How much will my payment be?
Your share of the Net Settlement Fund will depend on the number of valid claim forms that Class Members send in, the number of Fuqi common shares you purchased or acquired during the relevant period, and the timing of your purchases and sales.
You can calculate your Recognized Claim in accordance with the formula shown below in the Plan of Allocation. After all Class Members have sent in their Proof of Claim and Release forms, the payment you receive will reflect your Recognized Claim in relation to the Recognized Claims of all persons submitting Claim Forms. The Recognized Claim is not the amount of the payment that you can expect, but is used to determine how the Net Settlement Fund is allocated among all persons submitting claims.
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HOW YOU OBTAIN A PAYMENT — SUBMITTING A CLAIM FORM
If you do not want to be eligible to receive a payment from the Settlement and you do not want to release the Released Claims against the Released Defendant Parties, then you must take steps to remove yourself from the Settlement Class. This is called excluding yourself or “opting out.” Please note: if you bring your own claims, Defendants will have the right to seek their dismissal. Also, Defendants may terminate the Settlement if Settlement Class Members who purchased in excess of a certain amount of shares of Molina common stock seek exclusion from the Settlement Class.
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How will I obtain a payment?
To qualify for payment, you must be an eligible Class Member, send in a timely and valid Proof of Claim and Release form, and properly document your claim as requested in the Claim Form. You may download a Proof of Claim and Release form at right. Read the instructions carefully, fill out the Proof of Claim and Release form, include all the documents the form requires, sign it, and mail it in the enclosed envelope postmarked no later than April 21, 2015 for delivery to the Claims Administrator at the following address:
In re Fuqi International Inc. Securities Litigation
Claims Administrator
c/o Angeion Group
1650 Arch Street, Suite 2210
Philadelphia, PA 19103 -
When will I receive my payment?
The Court will hold a hearing on February 19, 2015, at 3:00 PM, to decide whether to approve the Settlement. If the Court approves the Settlement, there may be appeals. It is always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps more than a year. Even if no appeals are filed, it will take several months for the Claims Administrator to process all of the Proof of Claim and Release forms and determine the ultimate distribution amounts. Each person or entity that sends in a claim form will be informed of the determination with respect to his, her, or its claim. Please be patient.
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What am I giving up to receive a payment?
As a Class Member, you will not be giving up any rights that you currently have by submitting a Proof of Claim and Release form to receive a payment. Unless you timely and validly exclude yourself from the Class by the January 29, 2015 deadline, you are a Class Member and will be bound by the Release of claims against the Defendants. That means that you cannot sue, continue to sue, or be part of any other lawsuit against the Defendants about the Released Claims in this case. It also means that all of the Court’s Orders will apply to you and legally bind you and you will release your claims in this case against the Defendants whether or not you submit a valid Proof of Claim and Release form. The terms of the Release are included in the claim form. If the Court approves the Settlement, a Judgment will be entered, dismissing the Released Claims with prejudice against Defendants and Released Persons as to all Class Members.
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EXCLUDING YOURSELF FROM THE CLASS ACTION SETTLEMENT
If you do not want a payment from the class action Settlement, but you want to keep the right to sue or continue to sue the Defendants on your own for the Released Claims in the class action, then you must take steps to get out of the Class. This is called excluding yourself or is sometimes referred to as opting out of the Class.
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How do I get out of the Class?
To exclude yourself from the Class, you must send a letter by mail stating that you want to be “excluded from the Class in In re Fuqi International, Inc. Securities Litigation, Civil Action No. 10 Civ. 2515 (DAB).” You must include your name, address, telephone number, your signature, and the number of shares of Fuqi common stock you purchased between May 15, 2009 and March 27, 2011, inclusive, and/or the number of shares you purchased or acquired pursuant to or traceable to the Secondary Offering on or about July 22, 2009, the number of shares sold during this time period, if any, and the dates and prices of such purchases and/or sales. A request for exclusion shall not be effective unless it provides all the information called for in this paragraph and is postmarked within the time stated below, or is otherwise accepted by the Court. You must mail your exclusion request postmarked no later than January 29, 2015 to:
In re Fuqi International Inc. Securities Litigation
EXCLUSION REQUEST
Claims Administrator
c/o Angeion Group
1650 Arch Street, Suite 2210
Philadelphia, PA 19103
You cannot exclude yourself on the phone or by e-mail. If you ask to be excluded, you are not eligible to receive any Settlement payment, and you cannot object to the class action Settlement. You will not be legally bound by anything that happens in the class action lawsuit.
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If I don’t exclude myself, can I sue the defendants for the same thing later?
No. Unless you timely and validly exclude yourself from the Class, you give up any right to sue the Defendants for the Released Claims in the class action Settlement. If you have a pending lawsuit against any of the Defendants, speak to your lawyer in that case immediately. Remember, the exclusion deadline is January 29, 2015
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If I exclude myself, can I receive money from this Settlement?
No. If you exclude yourself, do not send in a Claim Form. But, you may be able to sue, continue to sue, or be part of a different lawsuit involving the Released Claims against the Defendants.
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THE LAWYERS REPRESENTING YOU
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Do I have a lawyer in this case?
The Court appointed the law firm of Abraham, Fruchter & Twersky, LLP to represent you and other Class Members. These lawyers are called Lead Counsel for Plaintiffs. There are also Additional Counsel for Plaintiffs who have worked on the case. You will not be directly charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.
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How will the lawyers be paid?
Lead Counsel will ask the Court for attorneys’ fees not to exceed one-third of the Settlement Fund and for expenses of up to $300,000, which were advanced in connection with the Action plus interest that is incurred. In addition, Lead Plaintiffs incurred expenses and devoted substantial effort directly related to the representation of the Class for which they will seek reimbursement. Puerto Rico Government Employees and Judiciary Retirement Systems Administration will seek an amount not to exceed $10,000, and Craig B. Laub, J.D. Pisut, and Sandra Redfern will seek amounts not to exceed $5,000 each. Such sums as may be approved by the Court will be paid from the Settlement Fund. Class Members are not personally liable for any such fees or expenses.
The attorneys’ fees and expenses requested will be the only payment to Plaintiffs’ Lead Counsel and Additional Counsel for their efforts in achieving this Settlement and for their risk in undertaking this representation on a wholly contingent basis. Since the case began in 2010, Lead Counsel and Additional Counsel have conducted all of the investigation, document review and other activities necessary to litigate this case. Lead Counsel for Plaintiffs and Additional Counsel have committed significant time and expenses in litigating this case for the benefit of the Class. To date, Lead Counsel and Additional Counsel have not been paid for their services in conducting this litigation on behalf of Lead Plaintiffs and the Class, nor for their substantial expenses. The fee requested will compensate Lead Counsel and Additional Counsel for their work in achieving the Settlement Fund.
Lead Counsel shall file a formal motion with the Court for approval of the Settlement, the Plan of Allocation, and the request for attorneys’ fees and reimbursement of expenses not later than 35 days prior to the Settlement Hearing. That motion will argue that Lead Counsel’s requested fees are well within the range of fees awarded to class counsel under similar circumstances in other cases of this type. The Court determines what counsel should receive from the Settlement Fund for fees and expenses, and may award less than this amount.
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OBJECTING TO THE SETTLEMENT
You can tell the Court that you do not agree with the Settlement or some part of it.
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How Do I Tell the Court that I Do Not Like the Settlement?
If you are a Class Member, you can object to the Settlement if you do not like any part of it, including the Plan of Allocation and the request for attorneys’ fees or expenses. To object, you must file a written objection, together with copies of all other papers and briefs supporting the objection, with the Clerk’s Office, as stated below, saying that you object to the Settlement in In re Fuqi International, Inc. Securities Litigation, Civil Action No. 10 Civ. 2515 (DAB). Be sure to include your name, address, telephone number, your signature, documents sufficient to prove the number of shares of Fuqi common stock purchased and/or acquired between May 15, 2009 and March 27, 2011, inclusive, and/or the number of shares you purchased or acquired pursuant to or traceable to the Secondary Offering on or about July 22, 2009, the dates and prices of each such purchase and/or each sale, and the reasons for each objection, including the legal and evidentiary support you wish to bring to the Court’s attention. Any objection must be mailed or delivered such that it is received by each of the following no later than January 29, 2015:
Court:
Clerk of the Court
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Daniel Patrick Moynihan U.S. Courthouse
500 Pearl Street
New York, NY 10007-1312Lead Counsel:
Mitchell M.Z. Twersky
Lawrence D. Levit
Abraham, Fruchter & Twersky, LLP
One Penn Plaza, Suite 2805
New York, NY 10199
212-279-5050Defendants’ Counsel Designees:
Robert W. Brownlie
DLA Piper LLP (US)
401 B Street, Suite 1700
San Diego, CA 92101-4297
619-699-2700Joel M. Mitnick
Sidley Austin LLP (US)
787 Seventh Avenue
New York, NY 10019
212-839-5871Scott D. Musoff
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, NY 10036
212-735-3000 -
THE COURT’S SETTLEMENT HEARING
The Court will hold a hearing to decide whether to approve the Settlement. You may attend and you may ask to speak, but you do not have to do either.
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When and Where Will the Court Decide Whether to Approve the Settlement?
The Court will hold a Settlement Hearing at 3:00 PM, on February 19, 2015, at the Daniel Patrick Moynihan U.S. Courthouse, 500 Pearl Street, Courtroom 24B, New York, New York, 10007. At this hearing the Court will consider whether the Settlement is fair, reasonable and adequate. The Court may move the date or time of the Settlement Hearing to a later date and/or time without further written notice to you. If the date or time of the Settlement Hearing is changed, the new date and/or time will be posted at www.fuqiclasssettlement.com. If there are objections, the Court will consider them. The Court will also consider how much to pay to Lead Counsel for Plaintiffs and the Lead Plaintiffs, and whether the Plan of Allocation is fair, reasonable and adequate. The Court may decide these issues at the hearing or take them under consideration for a later decision. We do not know how long these decisions will take.
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Do I have to come to the Hearing?
No. Lead Counsel will answer questions the Court may have. But, you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary.
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May I speak at the Hearing?
You may ask the Court for permission to speak at the Settlement Hearing. To do so, you must send a letter saying that it is your intention to appear in In re Fuqi International, Inc. Securities Litigation, Civil Action No. 10 Civ. 2515 (DAB). Be sure to include your name, address, telephone number, your signature, and the number of shares of Fuqi common stock purchased or acquired between May 15, 2009 and March 27, 2011, inclusive, and/or the number of shares you purchased or acquired pursuant to or traceable to the Secondary Offering on or about July 22, 2009. Your notice of intention to appear must be received no later than January 29, 2015, by the Clerk of the Court, Lead Counsel Designee and Defendants’ Counsel Designees, at the addresses listed above. If you intend to present evidence or witnesses, you must disclose that information and explain it in your letter. You cannot speak at the hearing if you exclude yourself from the Class.
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IF YOU DO NOTHING
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What happens if I do nothing at all?
If you do nothing, all of your claims against the Defendants will be released, but you will not receive any money from this Settlement because it is necessary to submit a Proof of Claim and Release form to receive a distribution from the Settlement Fund. You will still be bound by any judgment entered by the Court if you do nothing.
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GETTING MORE INFORMATION
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Are there more details about the Settlement?
The Notice summarizes the proposed Settlement. More details are in the Stipulation of Settlement dated as of September 8, 2014, which is downloadable from the "Important Documents" section of this website at right. You can also obtain a copy of the Stipulation of Settlement or more information about the Settlement by contacting Lead Counsel:
Abraham, Fruchter & Twersky, LLP
One Penn Plaza, Suite 2805
New York, NY 10119
212-279-5050or the Claims Administrator:
In re Fuqi International Inc. Securities Litigation
Claims Administrator
c/o Angeion Group
1650 Arch Street, Suite 2210
Philadelphia, PA 19103
877-351-0335
email: Fuqi@angeiongroup.comYou can also obtain a copy from the Clerk’s office during regular business hours:
Clerk of the Court
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Daniel P. Moynihan U.S. Courthouse
500 Pearl Street
New York, New York 10007-1312 -
How do I get more information?
All inquiries concerning this Notice should be directed to:
Lead Counsel:
Abraham, Fruchter & Twersky, LLP
One Penn Plaza, Suite 2805
New York, NY 10119Claims Administrator:
Fuqi Securities Litigation
c/o Angeion Group
1650 Arch Street, Suite 2210
Philadelphia, PA 19103