NEW YORK, Aug. 8, 2014 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed in the United States District Court for the District of New Jersey, on behalf of all persons who purchased or otherwise acquired the securities of China Commercial Credit, Inc. ("China Commercial" or the "Company") (Nasdaq:CCCR) during the period between November 14, 2013 and July 25, 2014, inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
The Complaint alleges that during the Class Period, China Commercial misled investors about its involvement in risky loans and loan guarantee obligations. In a February 18, 2014 Forbes article, China Commercial's Chief Executive Officer was quoted as saying that "[highly risky loans] among microcredit companies [in China] are not widespread." On May 9, 2014, in a public offering, China Commercial sold 1,650,386 shares at $3.99 per share, with net proceeds to it of $6.14 million. In the prospectus, dated May 8, 2014, China Commercial represented that it estimated its loss on its guarantee business to be about 1% of the contract amount.
On July 25, 2014, China Commercial issued a press release stating that (1) it had paid out $5.4 million in loan guarantees in Q1 2014, and had received only $0.7 million in cash and $2.1 million in one-year notes from the borrowers, and (2) it had paid out $3.7 million in guarantees in Q2 2014, of which it had only recovered $1.1 million, and converted $1.6 million of it to one-year notes. On this news, China Commercial's stock price fell $1.20, or 32%, damaging investors.
If you wish to serve as lead plaintiff, you must move the Court no later than October 6, 2014. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
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