On September 18, 2015, Judge Marrero granted final approval to a $12 million settlement with the auditor defendant, the principal remaining solvent entity in this matter. This is one of the largest settlements ever with an auditor defendant in a case involving a Chinese reverse merger company.
On August 15, 2014, in one of the first cases interpreting the Supreme Court’s recent decision in Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) (“Halliburton II”). Judge Marrero issued an order granting Plaintiffs’ motion for class certification in its entirety in In re China MediaExpress Holdings, Inc. Shareholder Litigation.
On February 28, 2013, in a ruling in In re China MediaExpress Holdings, Inc. Shareholder Litigation, U.S. District Court Judge for the Southern District of New York, Victor Marrero, ruled that Lead Plaintiffs’ allegations were sufficient to overcome China MediaExpress Holdings, Inc. and Deloitte Touche Tohmatsu Hong Kong's motions to dismiss the amended class action complaint.
On March 3, 2011, Defendant DTT sent a letter to the board and audit committee of CCME outlining numerous irregularities it encountered during its audit of CCME’s 2010 financial statements, including irregularities concerning the bank account balances for CCME’s PRC subsidiaries. This letter sets forth in great detail the numerous “red flags” that existed at CCME prior to the 2009 audit, but which were ignored by DTT in its audit procedures, including: 1) Abnormalities in CCME’s bank balances; 2) Unusual confirmations of bank balances; 3) Wildly different sets of financial statements provided to DTT and Chinese authorities; 4) Enormous profits and growth rates, with a small number of paid staff; 5) Reported operating income percentages far in excess of competitors; 6) Dramatically increased net income with virtually no spending in increased infrastructure; and 7) Faster growth in reported income and cash flow than any other U.S.-listed Chinese media company.
On March 11, 2011, Defendant DTT resigned as DTT's auditor, saying it "was no longer able to rely on the representations of management and that it had lost confidence in the commitment of the Board and the Audit Committee to good governance and reliable financial reporting." That same day, the NASDAQ suspended trading in CCME shares. On March 19, 2011 CCME's shares resumed trading on the pink sheets (after delisting by the NASDAQ) and its shares immediately plummeted from $11.88 to $2.16 a share or 81.8%. The shares currently trade at less than $0.20 per share, causing hundreds of millions of dollars in losses to the Class.