Practice Capabilities

Loeb & Loeb's China Litigation, Enforcement and Arbitration Response (CLEAR) Team represents U.S.-listed Chinese companies and their officers and directors, along with financial institutions and intermediaries involved in complex securities litigation, arbitrations and regulatory proceedings.

In the current market, heightened U.S. regulatory scrutiny of deals involving China-based organizations has given rise to a dramatic increase in accounting and fraud-related regulatory investigations and enforcement actions. U.S.-listed Chinese companies that have gone public by means of reverse mergers with U.S. shell corporations have been under particular attack, faced with a wave of allegations from short sellers, NASDAQ and SEC investigations, and securities class action litigation, as well as resulting disputes with their US-based private equity investors. As the regulatory climate becomes more strict and continues to put greater pressure on the industry, Loeb & Loeb’s CLEAR Team works with China-based clients and intermediaries to provide aggressive, quality, and focused representation to deter or defend contested securities matters or seek appropriate remedies where the circumstances permit.

Our team has vast experience litigating securities class actions and derivative actions, from pleadings through trials and appeals, as well as regulatory investigations and enforcement proceedings. We have handled hundreds of securities arbitrations before the Financial Industry Regulatory Authority, the New York Stock Exchange, NASDAQ and other self-regulatory organizations.

Our CLEAR Team attorneys also routinely help Chinese clients prepare for, respond to, and defend SEC and NASDAQ formal and informal investigations. We advise clients on the development of compliance policies and best practices to prevent accounting and fraud-related allegations, provide crisis management counseling, and help retain and coordinate with experts in accounting and other specialized areas as needed. We have also represented several of the major accounting firms in securities-related professional responsibility lawsuits. Additionally, as the going private trend continues among China-based public companies, our CLEAR Team has substantial experience representing management directors in shareholder class action lawsuits challenging these merger and acquisition transactions.

Loeb & Loeb’s defense attorneys have also been retained by numerous China-based companies to conduct internal investigations for the board, audit committees, independent directors or in-house counsel. When internal wrongdoing is discovered or alleged, a corporation must respond swiftly. We have conducted major investigations of fraud, embezzlement and other business crimes, and we have served as or represented court-appointed trustees, independent board committees, monitors and receivers of entities victimized by fraud. When an investigation reveals misconduct, we help to minimize any damage, and assist the company in bringing equitable or monetary claims against those responsible to obtain the best possible recovery for the company.

Service Approach

Loeb & Loeb has had a thriving securities practice in China for over 15 years, as well as years of experience dealing with the SEC in both adversarial and cooperative capacities. Our collective experience comes not only from trying and arbitrating hundreds of cases, but also from the prior experience of our team members, including former assistant U.S. attorneys, assistant district attorneys, general counsels, and managers in the securities industry. With this inside perspective, we are able to assess cases early, pursue mediation avenues, and provide robust counsel to our China clients.

Additionally, Loeb & Loeb’s attorneys and professionals in our Beijing office allow us to bridge cultural, time zone and language barriers to offer seamless access and service to our China-based clients. We also utilize cross-practice teams to draw on experts throughout the firm in corporate and securities, employment and labor, internal investigations, e-discovery and records management, insurance and litigation. This multi-disciplinary approach has resulted in an excellent track record of trial and arbitration victories, as well as extremely favorable settlements for our clients.

Representative class action litigation and investigatory matters for China-based clients include:

• Obtained dismissal of a shareholder class action on behalf of China Century Dragon Media Inc., where plaintiffs claimed that the Company’s registration statement and prospectus was materially false and misleading in violation of the Securities Act of 1933. The U.S. District Court judge concluded that plaintiffs failed to plead specific factual information demonstrating that China Century’s questioned revenue disclosures were false.
• Provided class action defense on behalf of Harbin Electric, Inc. Ten shareholder class action suits were filed in state or federal court challenging the fairness of a proposed going private transaction. Secured motion to dismiss the federal court action, including an endorsement of the fairness of the proposed price for the going private transaction. The New York state court actions were dismissed and settlement was reached in the Nevada state court actions.
• Providing class action defense on behalf of Fushi Copperweld, Inc. Twelve shareholder class action suits were filed in state or federal court challenging the fairness of a proposed going private transaction. We succeeded in obtaining the dismissal of both of the federal court actions and in transferring all of the Nevada state court actions to a single venue in Las Vegas, NV.
• Providing class action defense on behalf of Fushi Copperweld, Inc. pending in the United States District Court for the Southern District of New York and the Middle District of Tennessee, claiming alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act.
• Representing China MediaExpress Holdings, Inc. in five different groups of cases: federal class action defense litigation, derivative actions brought in state court in Delaware, litigation in Delaware state court and arbitration in Hong Kong initiated by private equity investor CV Starr, and books and records inspection litigation in Delaware state court, all commenced in connection with matters resulting from short-seller attacks. 
• Representing China Integrated Energy Inc. in federal class action defense litigation and in connection with matters resulting from short-seller attacks. 
• Representing Yongye International, Inc. in defense of short seller attacks and related matters. 
• Represented a China-based US public company in connection with SEC investigation regarding material misstatement in a public filing. Responded to Wells call and, on the basis of our Wells submission, the SEC terminated its investigation and informed the Company that it would not recommend commencement of an action. 
• Represented Jiangbo Pharmaceuticals, Inc. in matters relating to short seller attacks, including a formal investigation by the SEC. 
• Representing Sino Clean Energy, Inc. in federal class action defense litigation and in connection with matters resulting from short-seller attacks. 
• Representing Sino Clean Energy, Inc. in bringing a defamation lawsuit against the short seller blogger Alfred Little whose false and misleading online reports questioning Sino Clean’s accounting practices have resulted in significant losses for public investors. 
• Advising AutoChina International in matters resulting from short seller attacks. 
• Represented the Audit Committee of the Board of Directors of Orient Paper, Inc., in connection with the independent investigation of allegations of misappropriated revenue and in follow-on matters. 
• Obtained favorable settlement of a securities class action on behalf of Fuwei Films (Holdings) Co., Ltd. and certain present and former officers and directors arising out of alleged misstatements and omissions in a registration statement and prospectus. 
• Representing numerous other Chinese issuers in non-public SEC and NASDAQ investigations.

Clients and Industries

We represent Chinese companies and their officers and directors from a wide range of industries, as well as a number of major financial services institutions, underwriters, brokerage firms, auditors, accountants and other professionals in actions relating to securities issuances and transactions involving Chinese companies.

Leadership in Law

Loeb & Loeb was recently recognized by Thomson Reuters as among the market-leading defense firms for Chinese companies facing accounting fraud investigations and securities class actions. The article in Thomson Reuters News & Insight noted Loeb & Loeb among top defense firms having “longstanding Asia practices with strong client ties” and cited the favorable settlement obtained for Loeb client Fuwei Films (Holding) Co., Ltd. Loeb & Loeb’s on the ground presence in Beijing, longstanding China Practice and deep bench of seasoned litigators and securities professionals make us perfectly positioned to address the cross-border legal and regulatory challenges facing international companies today. Thomson Reuters also ranks Loeb & Loeb #1 for underwritten public offerings involving China-based issuers for the period 2008-2010.

Members of the Securities Litigation, Arbitration and Regulatory Enforcement Group routinely write and speak on regulatory developments and issues of interest in securities law, as well as conduct continuing legal education (CLE) programs for the firm's clients in the areas such as expert testimony, document retention, and electronic discovery.