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SouFun Accused Of Fake Transactions Securities Class Action

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SouFun operates a leading real estate Internet portal in China. This federal securities class action lawsuit alleges that SouFun Holdings made misleading statements and failed to disclose material facts that, when they were disclosed, caused its stock price to fall.

Who Is Affected?

This federal securities class action is brought on behalf of a class consisting of all persons who purchased SouFun American Depositary Shares (ADS) between May 20, 2015 and October 27, 2015, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934.  SouFun is a Chinese corporation maintaining its headquarters in Beijing, China.  Its ADS trades on NYSE under the ticker symbol “SFUN.”  

Procedural History

The complaint was filed on October 30, 2015 and is captioned L & G Rubin Family Trust, et al. v. SouFun Holdings Limited, et al.  It was filed in the California Central District Court and its civil docket number is 2:15-cv-08508.  The class period runs from May 20, 2015 through October 27, 2015, inclusive.

The class period begins on May 20, 2015, when SouFun issued a press release announcing its first quarter 2015 revenues, and touting SouFun’s expansions of e-commerce, 11,000 newly hired employees, and increased income.  These May 2015 statements were re-asserted in SouFun’s second quarter 2015 highlights.

On October 27, 2015, however, SeekingAlpha.com published a report on SouFun entitled “Chinese Media Reports Allege “Fake Contract” Trouble Brewing At SouFun,” revealing among other things:

  1. widespread layoffs at SouFun have come as a result of “faked contracts” employees were involved in creating;
  2. other outlets reporting that SouFun had knowledge of these fake transactions taking place;
  3. SouFun had not made any disclosures in the U.S. regarding these layoffs

SouFun’s stock fell 3.67% the very same day upon the report's release.

Current Case Status: 

        This case is in the notice period.  When a shareholder brings suit under certain federal securities laws, generally that shareholder must give notice via a press release.  This notice starts a sixty-day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well.  At the end of this sixty-day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation.  We will review the docket again in December and update this page as warranted.

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