Sina get sued in America due to laws violation

Just after Shanda announced its acquization of 19.5% shares of Sina, an America law firm filed a law suit against Sina for its violation of federal laws on behalf of shareholders. You can read full text of the complain here (PDF file)

“The case was filed in the United States District Court for the Southern District of New York on behalf of purchasers of SINA Corp. securities between 10/26/04 and 02/07/05 (the ‘Class Period’).”

In brief, the suit complains that Sina failed to disclosed its major incoming was from fortune-telling (I think it’s just an old trick only survives in the street) and mobile phone related service, such as short-messaging both of which suffered policies changing the FY 2004. Thus shareholders suffered investment loss due to Sina’s revenue was far from estimation. What’s more, in the lawsuit it is also complained that insiders from the company during the class period sold SINA shares at artificially inflated prices for proceeds in excess of $31 million. You can read the fact from MarketWatch.

From Keso’s blog: 上头有令. So it is possible you won’t see this news from China’s media.