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Friday, 15 July 2016


Introduction


 Thanks for your interest in this blog.


This blog has been created to foster and improve communications among shareholders of TIBET currently seeking justice in the USA Law Court against defendants  accused of registering a false and misleading IPO Prospectus with the USA Securities and Exchange Commission (SEC) and selling the shares to thousand of innocent victims through the facility of the NASDAQ.



TIBET is a very tiny Chinese company that claimed that it researches and manufactures Traditional Tibetan Medicine. The Underwriter for TIBET IPO is an investment firm called Anderson & Strudwick (later purchased by Sterne Agee in 2011). 



The USA SEC accepted and approved TIBET IPO registration document and it started trading in NASDAQ in January 2011 with ticker symbol TBET.  For the IPO prospectus see:


-- http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=7660224&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077

The IPO was priced at $5.50 and 3 million shares was sold to thousands of people.

After approximately  4 months after the IPO, the CEO resigned abruptly.

In February 2012, a website in China raised a red flag that the company's only operating asset was on auction because the company failed to pay its approximately $4.5 million debt to the Agricultural Bank of China which resulted from an Enforcement Order against TIBET issued by the PRC Yunnan Court due to TIBET's failure to pay its debts based on a previous Court judgement . For the auction, see:

http://www.fycqjy.com/cq/102733/102735/98706.html

On Feb 27, 2012, the CEO Mr. Yu Hong announced a $3 buyout offer and claimed the independent directors were reviewing it. Due to this news, the share price increased by more than 150%  and there was massive dumping of shares during this period. To address the alleged auctioning of the company's main operating asset, the dubious CEO also announced that an investigation of the auction would be conducted. Till date, there is no evidence that any investigation was conducted. For the dubious buyout offer news and Form 8-K filed with the SEC, see:

http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=8452845&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077

On April 3, 2012, the stock was halted by NASDAQ and additional information requested.

TIBET failed to respond to NASDAQ and also failed to update its shareholders what the additional information requested by NASDAQ were. TIBET also failed to file its audited financial statement for 2011 in Form 10-K. As a result, NASDAQ delisted the stock on April 27 and the reasons provided in :

http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=8601130&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077

On April 27, it opened in Pinksheet Grey market where it is currently trading worthless.


The shareholders had filed a class action lawsuit and hopefully, JUSTICE would be served. For the initial complaint see:


TIBET IPO Underwriter


Anderson & Strudwick (now Stern Agee) has brought several Chinese companies to the USA Market. TIBET was their most recent IPO deal. Prior to TIBET IPO & based on publicly available information on SEC filings, the firm had played a role in bringing the following Chinese Companies to the USA market:

OINK, DHRM, EFUT, SINO, PSOF, RCON, TRIT

Most of these companies are not yet delisted and are still trading in either NASDAQ or NYSE main boards but their share prices have been decimated from their original IPO prices. PSOF successfully completed a management buyout & go-private transaction in 2012.

Key Reason Why the IPO Underwriters are Fully Responsible and Liable


The following statement below is copied directly from Page 35 of the IPO prospectus:

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7660224-963-652903&type=sect&TabIndex=2&companyid=828647&ppu=%252fdefault.aspx%253fcik%253d1489077

"We will have an ongoing relationship with our Placement Agent that may impact our shareholders’ ability to impact decisions related to our operations.

In connection with this offering, we have agreed to allow our Placement Agent to designate two non-voting observers to our Board of Directors until the earlier of the date that:
(i) the investors that purchase shares in this offering beneficially own less than five percent (5%) of our outstanding shares; or
(ii) the trading price per share is at least four (4) times the offering price for any consecutive 15 trading day period.
Although our Placement Agent’s observers will not be able to vote, they may nevertheless significantly influence the outcome of matters submitted to the Board of Directors for approval. We have agreed to reimburse the observers for their expenses for attending our Board meetings, subject to a maximum reimbursement of $6,000 per meeting and $12,000 annually, which amount is not more than the reimbursement payable to our directors. The observer will be required to certify that such travel expenses are not reimbursed by any other party. We will also pay observers the same amount as our independent directors receive. As of the date of this prospectus, Mr. L. McCarthy Downs III and Mr. Hayden Zou are serving as our Placement Agent’s observers to our Board of Directors. See “Management – Board of Directors Observer.”

April 15, 2013

The following key questions or information requests for the defendants have been presented below in three categories namely: IPO Money Questions; Corporate Governance by Board Observers and Directors Questions and Auditors Responsibilities Questions:

IPO Money Questions
  1. Where is the IPO money now?
  2. Another key question would relate to Hayden Zou’s registration of TBET’s Hong Kong subsidiary, to which Hayden Zou retains the sole discretionary control even today. This Hong Kong subsidiary, registered in Hong Kong under the name of “Tibet Pharmaceuticals, Inc.”, should still hold the IPO money now. As TBET has never obtained the necessary Chinese government’s approval to transfer the IPO money cross the border to TBET’s Chinese operating entity in China, if the IPO money is not still in Hong Kong, then Hayden Zou should provide a detailed explanation of where it is?
  3. What measures, if any, did Board of Directors and Board Observers (Mac Downs and Hayden Zou) took to safe guard the IPO money?
  4. Who had control over the IPO cash?  To what bank account did the investment bankers send the IPO cash?  And where did it go from there?
Corporate Governance by Board Observers and Directors Questions
  1. TBET’s IPO prospectus talked extensively about the responsibilities of the Board of Directors and Observers to oversee the company’s operations and to safeguard shareholders’ interest. Among those, the directors and observers were supposed to have regular meetings, to approve capital expenditures and to review the auditor’s reports. Have they done so? If yes, provide transcript of all board meetings till date.
  2. Why haven’t the Board of Directors and Observers perform their fiduciary responsibility by providing an update to the shareholders regarding the state of the company since it was delisted from NASDAQ on April 27, 2012?
  3. When did the Board of Directors and Observers first become aware of the allegations that the operating company (Shangri-La Tibetan Medicine Company) had an undisclosed debt obligation to a Chinese bank?
  4. What did the Board of Directors and Observers do when they became aware of this allegation?
  5. What did the Board of Directors and Observers do when it received the going private offer letter from the President Mr. Hong Yu?
  6. What did the Board of Directors and Observers do when Mr. Hong Yu failed to file the 10-K? 
  7. 11.    Has the Board of Directors and Observers considered replacing the President Mr. Hong Yu?
  8. Has the Board of Directors and Observers taken any steps to get the 2011 and 2012 financial statements prepared and audited?
  9. When is the last time any of the Board of Directors and Observers had any contact with Mr. Hong Yu?
  10. Why haven’t the Board of Directors and Observers provided any form of update to the shareholders regarding the going private offer from Mr. Hong Yu after more than one-year as they promised the general public in the news release that was issued by the company?  Was this offer made to manipulate and increase the share price or push for IPO money to be transferred to china? If not, why was the offer made and why haven’t shareholders received any form of update till date?
  11. Has the Board considered the liquidation of the company? As TIBET’s shares are currently illiquid, are the Board of Directors and Observers considering approving Mr. Hong Yu offer or any other alternative share buyback  of all the 3 million IPO shares that currently has no liquid market for it?
  12. When did Mr. Hong Yu request that the IPO funds be sent to the Chinese subsidiary?  What did he say would be the use of such funds?  What was the Board's reply to his request?
  13. Have the Board of Directors and Observers ensured TIBET’s Securities and Exchange Commission IPO filings and subsequent financial statements correctly reflects the business of the company?
Auditors Responsibilities Questions
  1. Why did SHERB & Co., LLP (the most recent auditor of TIBET) refuse to sign-off and provide an audit opinion on TIBET’s 2011 end of year audited 10-K financial statement? As this was a material event that resulted in the eventual delisting of the company’s shares from NASDAQ, why were the reasons not disclosed to the shareholders (the owners of the company) and general investing public?
  2. As TIBET’s IPO Auditor, what steps did ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP took to independently verify the credibility and accuracy of the information in the audited financial statements provided in the IPO for years ending in 2008, 2009 and 2010?
  3. As TIBET’s public Auditor after the IPO and until September 2011, what steps did ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP took to independently verify the credibility and accuracy of the post-IPO 10-Q quarterly financial statements that were issued to the general public?
  4. After resigning as TIBET’s Auditor on September 12 2011, ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP (ACSB) made an SEC filing indicating that the principal accountant's reports of ACSB on Tibet's financial statements for the years ended December 31, 2009 and 2010 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. This was a very compelling statement from a company that claims to be a licensed independent registered public accounting firm in the USA.  The general investing public makes their investment decisions by seriously taken into account audit opinions provided by auditors like ACSB or the financial gatekeepers of public companies. With all that had happened over the past year, does ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP still think and believe that its SEC filings and IPO audit opinions on TIBET financial statements were credible and reliable?

May 1, 2013

The amended complaint was filed today with more detailed information. The most interesting information contained in the amendment is that the IPO money is in a HSBC Bank account in Hong Kong controlled by Hayden Zou.  The amended claim includes seeking an injunction to freeze the worldwide asset of TBET including the HSBC account thereby recovering the IPO money for the victims consistent with the stipulations of Section 10 to 12 of the USA SEC ACT of 1933, including all appropriate rescission. I have always believed that this TBET Case is very special and unique when compared to all the other Chinese Stock Scams as all the key defendants are USA based entities and citizens plus the fact that the IPO money never made it to the highly dubious CEO Mr. Yu Hong; as such there is a very high likelihood that victims of this crime would get justice in the USA Court and recover all their losses with interest.

Consequently, any Rescission award will likely result in the adoption of the sliding formula described in details in Sections 11 and 12 of the USA SEC ACT of 1933 as summarized below:
 
Section 11
  • The defendants must pay the victims the difference between the amount paid for the security (not exceeding the IPO price) and the value thereof as of the time such suit was brought, or
  • the difference between the amount paid for the security (not exceeding the IPO price) and the price at which such security shall have been disposed of in the market, or  
  • the difference between the amount paid for the security (not exceeding the IPO price) and the price at which such security shall have been disposed of after suit but before judgment if such damages shall be less than the damages representing the difference between the amount paid for the security (not exceeding the IPO price) and the value thereof as of the time such suit was brought.
Section 12
  • the victim can sue to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if he no longer owns the security.

 July 4, 2013

ROSEN is expected to respond to the motions to dismiss filed by the Defendants on or before August 1, 2013 upon which the Defendants would have 7 days to respond after which the Judge would issue an order to the "Motion to Dismiss". If the defendants motion is denied, the defendants would have 20 days from the date the Judge issued the order to respond to the complaint.  
After reviewing the motions  filed by the defendants on June 17, I found this particular statement in the affidavit filed by Hayden Zou quite outrageous and incredible:

Hayden Zou said: “I never had any influence over matters submitted to Tibet's Board of Directors because, to my knowledge, 'Tibet never held any Board meetings”.

By saying that TIBET never held a board meeting for the whole time it raised the IPO Money till it was delisted, Hayden Zou is therefore suggesting that in the midst of all these key material events below:
  • The Board of Directors never met to perform their Fiduciary Responsibilities and Corporate governance roles for the entire time TIBET was issuing statements to the SEC and the general investing public.
  • The Board of Directors never met to review the quarterly reports and financial statements.
  • The Board of Directors never met to review the fictitious Buy Out offer that the Criminal CEO Mr. Yu Hong claimed the Board of Directors had received.
  • The Board of Directors never met to investigate the Auction that the CEO claimed would be investigated by the Company.
  • The Board of Directors never met to review the final IPO prospectus or discuss how to utilize the IPO proceeds.
  • The Board of Directors members in the Audit Committee never held a meeting with the Auditors of the Company.
  • The Board of Directors never met to discuss the resignation of the former CEO.
  • The Board of Directors never met to discuss the resignation of the IPO Auditor and the appointment of the new Auditor.
  • The Board of Directors never met to discuss TIBET's failure to file its 2011 audited financial statement.
  • The Board of Directors never met to discuss the delisting notice from NASDAQ.
This statement by Hayden Zou basically proves that the defendants acted deliberately in bad faith and were reckless & negligent, consistent with their reckless & negligent actions that resulted in false and misleading information to be included in the IPO prospectus, thereby preventing them from discovering the fraud. How can the Board of Directors and Board Observers of  TIBET not held a single meeting for the whole time TIBET was issuing news and financial statements to the USA SEC? This is incredible!!!

August 9, 2013

Defendants submitted their responses today including the Auditor. The motion is now with the Judge to decide. My understanding is that the Judge's decision will be coming in few weeks. While we are waiting for that, we all must remember that the key issues in this Case are:
  • Defendants failed to disclose that there was an enforcement order against TIBET in the IPO.
  • Defendants failed to disclose in the IPO that the Court had ordered the liquidation of TIBET's only operating entity in China.
  • As such, the information contained in the IPO was misleading and false.
  • TIBET failed to file any other audited financial statement with the SEC after the IPO. As such, all investors that purchased stocks of TIBET based their decision on the misleading audited financial statements in the IPO prospectus.
  • If the Defendants had completed a legal check, they would have discovered that TIBET was already bankrupt while they were issuing the IPO propectus to investors.
  • This crime was not a chance crime. It was an intentionally planned crime which the Defendants could not have prevented because they were reckless and careless, consistent with their actions after the IPO as stated in the recent Affidavit by Hayden Zou which he swore under Oath that TIBET Board of Directors never held a single Board Meeting! Simply mind boggling!!
  • Defendant's reckless actions caused many innocent victims to be significantly damaged because TIBET shares are now worthless and illiquid.
  • Defendants are still in full control of the IPO money till date. 

  October 11, 2013



This Google Earth map of Shangri-La County below shows that Tibet's Chinese Operating entity is less than 2.5km from the Agricultural Bank of China and the Deqen Intermediate People's Court. In fact they are so close that one can drive from TIBET to the bank or court in less than 5 minutes. If not for being negligent and reckless, the Underwriters and Auditors have no acceptable reason not to have visited the Bank and do a legal check with the Court. The Bank is a block away from the Court or less than 200m (for larger map size, click on the map below).


  

November 25, 2013

Tibet's IPO Auditor ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP (ACSB) was investigated in 2010 by the USA Public Company Accounting Oversight Board (PCAOB). Immediately after its resignation on September 12, 2011 as TIBET's auditor, the USA Public Company Accounting Oversight Board published a highly critical report on September 23, 2011 that highlighted the deficiencies in ACSB's past auditing works. Some of the general deficiencies identified in the PCAOB report to ACSB includes:
  • the failure to perform sufficient audit procedures to evaluate whether goodwill was impaired;
  • the failure to perform sufficient audit procedures to evaluate the accounting for a transfer of buildings and related land use rights;
  • the failure to perform sufficient audit procedures to test revenue;
  • the failure to perform sufficient audit procedures to test accounts receivable;
  • the failure to perform sufficient audit procedures regarding warrants;
  • the failure to perform sufficient audit procedures to test the valuation of stock-based compensation; and
  • the failure to evaluate the effect of reported material weaknesses on the nature, timing, and extent of substantive procedures performed in the audit of the financial statements.
A detailed copy of this PCAOB report is in:

November 30, 2013

On November 21, 2013, the United States Public Company Accounting Oversight Board (the "Board" or "PCAOB") issued an order censuring TIBET's Auditor Acquavella, Chiarelli, Shuster, Berkower & Co., LLP (ACSB), revoking ACSB's registration, and imposing a civil penalty in the amount of $10,000 upon ACSB. The Board is imposing these sanctions on the basis of its findings that ACSB (a) violated PCAOB rules, quality control standards and auditing standards in connection with the audits of three issuer clients; and (b) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients. For more on this order, click the link below:




The sanctions that the Board is imposing on Respondent in this Order may be imposed only if a respondent's conduct meets one of the conditions set out in Section 105(c)(5) of the Act, 15 U.S.C. § 7215(c)(5). The Board finds that Respondent's conduct described in this Order meets the condition set out in Section 105(c)(5), which provides that such sanctions may be imposed in the event of: (A) intentional or knowing conduct, including reckless conduct, that results in a violation of the applicable statutory, regulatory, or professional standard; or (B) repeated instances of negligent conduct, each resulting in a violation of the applicable statutory, regulatory, or professional standard.
In addition to the above  sanctions, the PCAOB also issued the following order against a staff of the company called David T. Svoboda who was responsible for the company's Public Auditing practices in 2009, 2010 and up to September 30, 2011; and as such was responsible for Tibet's IPO Audit:

By this Order, the Public Company Accounting Oversight Board (the "Board" or "PCAOB") is censuring David T. Svoboda, CPA ("Svoboda" or "Respondent"), and barring him from being an associated person of a registered accounting firm. The Board is imposing these sanctions on the basis of its findings that Svoboda: (a) violated PCAOB rules and auditing standards in connection with the audits of three issuer clients and the improper creation, addition, and backdating of audit documentation prior to a Board inspection; (b) directly and substantially contributed to a registered public accounting firm's violation of PCAOB quality control standards; and (c) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients. For more on this Order click:

http://pcaobus.org/Enforcement/Decisions/Documents/20131121_Svoboda.pdf


These sanctions from the PCAOB against the disgraced Tibet's IPO Auditor clearly demonstrates and proves how malicious, dubious, reckless and negligent the Auditor was in executing its role as the financial gatekeeper of the issuers they were auditing. They were reckless beyond any ethical and professional standards including the improper creation, addition, and backdating of audit documentation prior to Board's inspection thereby compromising the independency of the Audit.


Based on PCAOB findings, the Auditor basically was outsourcing the Auditing Work to another China Firm that was not registered with the PCAOB and as such lacked proper trainings of the USA PCAOB Auditing Standards and Quality Control procedures. The Auditor failed to train these Chinese staffs who were significantly conducting the audit on their behalf in China. The Auditor in many cases failed to confirm suppliers and customers transactions and even went as far as creating the Consolidated Financial Statements for these companies thereby "Not Acting Independent" of the Chinese company as required in the PCAOB Auditing Standards. Their actions were disgusting, malicious, highly unethical and cruel!! They are a DISGRACE to the auditing profession and to the intent of the Auditing Practices. They betrayed all the Public Trust and Authority given to them as Auditor of these Chinese Companies thereby misleading investors and causing significant financial losses.

December 13, 2013

Cornerstone Research recently published a comprehensive research report on Opt-Out cases. This report provides, for what Cornerstone believe is the first time, a comprehensive quantitative analysis of publicly available lawsuits and settlements of so-called opt-out securities cases: cases in which at least one putative class member excludes itself from the class in order to pursue a separate lawsuit against the defendant. Cornerstone analyzed publicly available information about the judgments and settlements that resulted from opt-outs from securities class action settlements reached between 1996 and 2011. The report is in:
The key flaws in Class action Settlement Negotiations are the following:
  • Most Class Action Lawyers are often driven to get settlement for profit reasons which is usually against the interest of victims seeking true Justice from the Court through Jury Trial  against defendants that have harmed them.
  • Most Class Action Settlement negotiations fails to properly assess and calculate the exact amount of damages in dollars incurred by all Class members. As such, settlement negotiations are often done without any factual evidence backing the actual percentage of recovery that the victims in the Class are getting. As an example, when there is a settlement for a specific amount, there is no document or evidence disclosing how much loss in total was actually incurred by Class Members. There is no document specifying how much percentage of the actual loss incurred by all Class members would be recovered. This critical information that can be readily obtained through retaining the services of an Independent Damage Expert is often not investigated and disclosed thereby making the assessment of the fairness Opinion of  Class Action settlement highly dubious, questionable and opaque. 
  • On the other hand, a victim who opted out and filed a private lawsuit against devious and malicious defendants that have harmed him or her would be seeking specific amount in damages consistent with the total amount of money he or she lost from the scam. This is significant because it presents to the Court the actual specific amount the victim is seeking unlike in Class Action that never provides this level of detail per Class member.
  • The legal fees, expert fees, expenses and claim administration fees are so high that it renders  the effectiveness of the whole Class Action process highly questionable for victims of cruel crimes.
  • For the defendants, Class Action represents a very good option for them because once they settle a Class Action Case at laughable and ridiculously low recovery percentage, the Ignorant Victims in the Class that accepted the Settlement and failed to Opt Out would be Bound Forever not to bring any other lawsuit in the future against the defendants on the same matter.
  • Section 11 of the USA SEC ACT of 1933 requires the loss incurred by each Class member to be calculated through subtraction of the price paid by the victim (not to exceed the IPO price) from the price sold. This method in the 1933 ACT provides the most reliable method of calculating the total loss incurred by all the Class members. For example, a company like TIBET that issued 3 million shares in the IPO but had insiders with approximately 11.8 million shares owned by insiders including Hayden Zou, Phillip Zou and their Company Fulcan Investments LLC, RMCC Investments LLC and Broadview Richfield Holdings LLC and Investor Relation Firm like Trilogy Capital that was issued around 33,334 shares. If all these approximately 11.8 million shares were dumped in the market which is highly likely, you would see the significant flaw in the Class Action. It would definitely result in more than 14 million damaged shares and not just only the 3 million IPO shares. These are specifics damage calculation that must be investigated to assess the true magnitude of the damage incurred by the Class victims.

December 14, 2013

Potential Conflict of Interest - IPO Agent Board Observer and Tibet

The following is the shareholding information contained on Page 39 of the IPO Prospectus on SEC's website: http://www.sec.gov/Archives/edgar/data/1489077/000119312511009307/d424b3.htm
"The remainder of 798,750 common shares belong to five other investors, as follows: 424,375 shares are held beneficially by two early-stage investors (Hayden and Philip Zou) and their company (Fulcan Investments, LLC), and a total of 374,375 shares are held by two entities and one individual who provided services, as follows: 20,000 shares owned by Richard Ng, who paid $300 and also provided services to us at the request of Fulcan Investments, LLC; 177,187 shares owned by RMCC Investments, LLC, which provided services to Fulcan Investments, LLC; and 177,188 shares owned by Broadview-Richfield Holdings, LLC, an entity controlled by shareholders of our U.S. legal counsel, which provided services to Fulcan Investments, LLC and our company. Mr. Zou transferred his right to receive these shares to Mr. Ng, RMCC Investments, LLC and Broadview-Richfield Holdings, LLC. TBET indirectly controls YSTP through its 100% equity interests of WFOE".
As Hayden Zou is associated with Fulcan Investments LLC as disclosed in the IPO, and 424,375 shares of Tibet can be originally traced back to Hayden Zou, his brother Phillip Zou and their company Fulcan Investment LLC notwithstanding the transfer of rights, there is definitely a Conflict of Interest. Additionally, the owner of the entity RMCC Investments LLC was not disclosed in the IPO but 177,187 shares were issued to this RMCC for services provided to Hayden's Fulcan Investment LLC. It would be worthwhile to uncover the owner of RMCC to assess whether the owner had conflict of interest as well. Also, 177,188 shares were issued to Broadview-Richfield Holdings LLC owned by the U.S. legal counsel that provided services to Hayden Zou's Fulcan Investments LLC. Based on the foregoing facts and reasons, there is definitely a compelling evidence of conflict of interest and motivation for Hayden Zou (the IPO Underwriter's Agent Board Observer) not to independently act as TIBET's Board Observer. If these shares issued to entities related to Hayden Zou were sold in the market to victims of this scam, the proceeds MUST be disclosed and disgorged. Additionally, as it was disclosed that many of these entities associated with Hayden Zou and his company Fulcan received TIBET shares for services provided to Tibet, it would make sense to understand the type of services these entities were providing to Tibet. 

January 15, 2014

Nothing new except waiting on the Court. Meanwhile, here are some recent pictures taken inside the premises of Tibet's office in Shangri-la:






June 13, 2014


The following provides a summary of what the players in this fiasco are doing now:

  • Hayden Zou (Board Observer) : Plotting to bring new Chinese company into the USA market again.  
  • Lewis Mccarthy Downs III (Board Observer): Currently working out of a satellite office for Capitol Securities Management, Inc. He is still a Registered Broker with FINRA CRD# 1184428.
  • Anderson and Strudwick (Underwriter): Acquired by Sterne Agee; former CEO Damon Joyner is now President and Chief Executive Officer of Sterne Agee Clearing based in Alabama.
  • The Auditor ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP (ACSB) no longer exist and has transformed to Acquavella, Chiarelli, Shuster & Co., LLP. ACSB censured and banned by PCAOB for two years. Audit Head David Svoboda  banned for three years by PCAOB and currently the Owner and Managing Member of David Svoboda CPA, PLLC.
  • Sherb & Co: Most recent auditor also censured and banned by the PCAOB. 
  • Yu Hong, CEO - Vanished
  • Taylor Guo, Ex CEO & Director - Vanished
  • Sabrina Ren, CFO - Vanished
  • Dr. Wenbo Chen, Director - Vanished
  • Solomon Chen, Director - Vanished
  • Youhang Peng, Director - Defendant 

July 7, 2014


The defendants filed motion to dismiss. Mr. Hayden Zou basically filed the same story he had said before. He wants the Case to be dismissed because he claimed that he never influenced any board meeting and that TIBET never held a single Board Meeting; and that he is not a Section 11 defendant, even though the IPO Prospectus clearly stated that he is the IPO Agent and Tibet's Board Observer with authority and power to influence Board's decision. Throughout his submission, Hayden Zou never clearly addressed the key issues of misrepresentation and false financial statements in the IPO Prospectus. His argument centered mainly on "I am not involved with the IPO and I don't know what happened", which is totally insane and bunch of lies. He can't claim ignorance of the IPO and being in control of the IPO money. Regarding being in control of the IPO Proceeds, Hayden Zou did not address this statement in his filing. He failed to clearly address the key issues and simply danced around the issues by claiming that the Case should be dismissed mainly because he did not sign the IPO documents, and is not a named person in Section 11 requirements. The other defendants are expected to file before midnight today and I will be reporting on their arguments.

I’ve had the chance to read through Mr. Hayden Zou’s Motion to Dismiss filed on July 7 with the Court. 

-          Mr. Zou’s Motion failed to address any of the key issues raised in the complaint as it relates to the misleading IPO Prospectus, bank’s debt default and inflated revenue and assets. Rather, Mr. Zou danced around the key issues and focused his motion on not being a Section 11 defendant per the SEC 1933 ACT. To properly respond to that and to show that he is indeed a Section 11 defendant with significant influence on Board’s decision, the following statement below is copied directly from Page 35 of the IPO prospectus on SEC's website: http://www.sec.gov/Archives/edgar/data/1489077/000119312511009307/d424b3.htm:

o   "We will have an ongoing relationship with our Placement Agent that may impact our shareholders’ ability to impact decisions related to our operations. In connection with this offering, we have agreed to allow our Placement Agent to designate two non-voting observers to our Board of Directors until the earlier of the date that:(i) the investors that purchase shares in this offering beneficially own less than five percent (5%) of our outstanding shares; or(ii) the trading price per share is at least four (4) times the offering price for any consecutive 15 trading day period.Although our Placement Agent’s observers will not be able to vote, they may nevertheless significantly influence the outcome of matters submitted to the Board of Directors for approval. We have agreed to reimburse the observers for their expenses for attending our Board meetings, subject to a maximum reimbursement of $6,000 per meeting and $12,000 annually, which amount is not more than the reimbursement payable to our directors. The observer will be required to certify that such travel expenses are not reimbursed by any other party. We will also pay observers the same amount as our independent directors receive. As of the date of this prospectus, Mr. L. McCarthy Downs III and Mr. Hayden Zou are serving as our Placement Agent’s observers to our Board of Directors. See “Management – Board of Directors Observer.”


o   The statement above is self explanatory and clearly shows that the Board Observers have significant influence on the outcome of matters submitted to the Board of Directors for approval, thereby making a Section 11 Defendant.


o   Additionally, Mr Zou played significant roles that influenced the registration of the IPO and these roles and his share based compensations are well documented in the IPO Prospectus. As such, Mr. Zou cannot claim ignorance of these facts. The following is the shareholding information contained on Page 39 of the IPO Prospectus on SEC's website: http://www.sec.gov/Archives/edgar/data/1489077/000119312511009307/d424b3.htm"On March 26, 2010, YSTP and each of the shareholders of YSTP entered into an Entrusted Management Agreement, Exclusive Option Agreement, Shareholders’ Voting Proxy Agreement and Pledge of Equity Interest Agreement (collectively, the “Control Agreements”) with WFOE in return for ownership interests in TBET. Through the organization of TBET as a holding company, 19 YSTP investors (or, in some cases, entities they control) now own a total of 10,983,750 of the common shares of TBET. Of the remaining 898,750 TBET common shares, 30,000 are owned by early-stage investors who paid a total of $100,000 for their shares. The remainder of 798,750 common shares belong to five other investors, as follows: 424,375 shares are held beneficially by two early-stage investors (Hayden and Philip Zou) and their company (Fulcan Investments, LLC), and a total of 374,375 shares are held by two entities and one individual who provided services, as follows: 20,000 shares owned by Richard Ng, who paid $300 and also provided services to us at the request of Fulcan Investments, LLC; 177,187 shares owned by RMCC Investments, LLC, which provided services to Fulcan Investments, LLC; and 177,188 shares owned by Broadview-Richfield Holdings, LLC, an entity controlled by shareholders of our U.S. legal counsel, which provided services to Fulcan Investments, LLC and our company. Mr. Zou transferred his right to receive these shares to Mr. Ng, RMCC Investments, LLC and Broadview-Richfield Holdings, LLC. “. As Hayden Zou co-owns Fulcan Investments LLC as disclosed in the IPO and 424,375 shares of Tibet can be originally traced back to Hayden Zou, Phillip Zou and their company Fulcan Investment LLC; Hayden Zou cannot claim ignorance of the contents of the IPO Prospectus. Additionally, 177,187 shares were issued to the entity RMCC Investments LLC (RMCC) for services provided to Hayden Zou's Fulcan Investment LLC. Also, 177,188 shares were issued to Broadview-Richfield Holdings LLC owned by the U.S. legal counsel that provided services to Hayden Zou's Fulcan Investments LLC in relation to the IPO. Based on the foregoing, there is definitely a compelling evidence of vested interest and influence by Hayden Zou (the IPO Underwriter's Agent Board Observer) during the course of Tibet’s IPO Registration. As such, it would be unacceptable, lies and deceptive for Mr  Hayden Zou to claim ignorance of these facts.


-We need Mr. Zou to provide  clarity about why, when and how the Zou Family became early investors in TIBET, and why they have such close linkages to Tibet as an early investor.

- Verify if Mr. Hayden Zou or Mr. Philip Zou or relatives or friends have been dealing with TBET shares following the IPO (i.e., non-disclosed insider trading).
- Verify the details of the specific services Hayden Zou and his company Fulcan Investments LLC rendered to TIBET that warrants many TIBET shares to be issued to Zou, his company  and other entities associated with him for these services.
-  Another outrageous reason he mentioned in his motion is that he did not influence any matter because Tibet Directors never held  single meeting. I personally found this statement damning and highly demonstrates an act of bad faith by him and the other defendants.  By saying repeatedly in his motion that TIBET never held a board meeting for the whole time it raised the IPO Money till it was delisted, Hayden Zou is therefore stating that in the midst of all these key material events below:
o   The Board of Directors and Board Observers never met to review the final IPO prospectus or discuss how to utilize the IPO proceeds.
o   The Board of Directors and Board Observers never met to perform their Fiduciary Responsibilities and Corporate governance roles for the entire time TIBET was issuing material financial statements to the SEC and the general investing public.
o   The Board of Directors and Board Observers never met to review the quarterly reports and financial statements.
o   The Board of Directors and Board Observers never met to review the fictitious Buy Out offer that the CEO Mr. Yu Hong claimed the Board of Directors had received.
o   The Board of Directors and Board Observers never met to investigate the Auction that the CEO claimed would be investigated by the Company.
o   The Board Observers and Board of Directors members in the Audit Committee never held a meeting with the Auditors of the Company.
o   The Board of Directors and Board Observers never met to discuss the termination of the former CEO Mr. Taylor Guo on June 6, 2010 and the appointment of the new CEO Yu Hong.
o   The Board of Directors and Board Observers never met to discuss the abrupt resignation of the IPO Auditor ACQUAVELLA, CHIARELLI, SHUSTER, BERKOWER & CO., LLP (ACSB) on September 12, 2011 and the appointment of the new Auditor Sherb & Co .
o   The Board of Directors and Board Observers never met to discuss TIBET's failure to file its 2011 audited financial statement.
o   The Board of Directors and Board Observers never met to discuss the delisting notice from NASDAQ and how to respond to the exchange inquiries.
This outrageous statement by Hayden Zou basically proves and demonstrates beyond any reasonable doubt that the defendants acted deliberately in bad faith and were intentionally reckless& negligent, consistent with their reckless & negligent actions that resulted in false and misleading information to be included in the IPO prospectus, thereby preventing them from discovering the fraud.  


July 8, 2014

Defendants Sterne Agee, ACSB and Mccarty filed motion to dismiss. Sterne Agee seeked dismissal based on stating that it acquired only subsets of Anderson & Strudwick and not the liabilities. While all the key viable assets of Anderson and Strudwick including key management staff were all acquired by Sterne Agee, Sterne found it wothwhile to say that it is not liable for the sins of a company it acquired almost almost all its viable assets. This is simply ridiculous! What Stern failed to disclose is that the President & CEO of Anderson & Strudwick as at the time of the IPO, Mr. Damon Joyner,  is now President and Chief Executive Officer of Sterne Agee Clearing.

I have reviewed Mccarty’s Motion and just like Zou’s Motion, he failed to address any of the key issues and danced around it. Mccarty also centered his argument on not being a Section 11 defendants and that Tibet never held a single board meeting and as such he never influenced any Board’s decision.


My responses to Mccarty’s Motion are the same as those provided above for Hayden Zou. It is simply mind boggling that the defendants have the audacity to repeat over and over again that TIBET never held a single board meeting when in fact there were many evidence backed material events including the IPO that would require, as a minimum level of due-diligence, a board meeting to review the contents of the IPO Prospectus and the financial statements. The IPO prospectus clearly described his role as a Board Observer & IPO Underwriter Agent, and his authority to significantly influence Board’s decision, and that his compensation is similar to that of an independent director.


It would be highly unethical and unprofessional for Mccarty to claim that the Board Observers never met with Tibet’s Board of Directors, to at least review the contents of the IPO Prospectus that they were marketing to the general investing public; the least due diligence duty any ethical professional in the financial industry can do.


By repeating over and over again that the Board Observers and IPO Agents never held a single meeting with the Board of Directors and never influenced any Board’s decision, Mr. Mccarty and Hayden Zou are demonstrating beyond any reasonable doubt that the defendants acted in the worst level of BAD FAITH expected from a financial professional in protecting the interest of the general investing public, therey supporting our complaint that the defendants were highly reckless, cruel, acted in bad faith and negligent.


On pages 23 and 24 of the Auditor’s Motion, the Auditor stated the following:


“Even examining other facts alleged in the complaint, reveals that the events occurred unconnected to the audit opinion, which was of the financial statements as of December 31, 2009. Specifically, the bank judgment, seizure of assets and public auction all occurred after ACSB issued its audit opinion. ACSB opined about year end 2009, but the judgment occurred September 10, 2010, the assets were frozen on January 10, 2011 and the assets were auctioned on February 17, 2012. These are the events that allegedly caused Plaintiffs’ loss and which are alleged should have been disclosed in the registration statement or otherwise. However, as all of these events took place after the year audited by ACSB, nothing in ACSB’s audit opinion could have led to the alleged losses. Here, the allegations set forth in the complaint require dismissal due to a lack of loss causation as to the statements attributed to ACSB. Whether this is called a lack of causation or “negative causation,” the concept is that the events that led to Plaintiffs’ loss all relate to events after the period covered by ACSB’s audit opinion and the disclosures causing the loss had nothing to do with the ACSB audit opinion. As a result, there can be no liability as against ACSB for those losses”.


For the Auditor's statement above, I disagree with the Auditor’s lies that the events occurred after the audit opinion of December 2009. Even though the Chinese Court Judgement was issued on September 10, 2010, the event that lead to it took many years.  The complaint and Bank Suit clearly indicated that the three loans from the Agricultural Bank of China occurred from 1999 to 2003 totaling RMB 20,630,000 as presented in the Table below. The loan dates indicated in the table clearly shows that debt existed during the 2008 and 2009 Audit work.

Loan Date
Loan Amount
Balance Remaining
Dec 29, 1999
RMB 2,700,000
RMB 2,400,000
Aug 15, 2003
RMB 10,230,000
RMB 10,230,000
Oct 16, 2003
RMB 7,700,000
RMB 7,700,000
Total
RMB 20,630,000
RMB 20,330,000

What I also found damning & incredible is that Auditor indicated that the last Audit Opinion was based on the December 2009 Audit. What this suggest is that no Audit was completed throughout January to December 2010 . As such, the IPO was based on an outdated and expired Audit Opinion exceeding one year old. The Underwriter, Auditor and other defendants failed miserably to demand for another audit considering the more than 12 months gap in dates from the last 2009 Audit. This again highly demonstrates beyond reasonable doubt how careless, reckless and negligent the defendants were in performing their basic due diligence duties associated with the IPO.

It is also very useful & important to know that this Auditor has being sanctioned and censured on several occasions by regulators and banned for poor auditing practices based on the following events:

-          On September 23, 2011, the USA Public Company Accounting Oversight Board published a highly critical public report on September 23, 2011 that highlighted the deficiencies in ACSB's past auditing works of some unnamed Chinese issuers based on their 2010 inspections of the Auditor. Some of the general deficiencies identified in the PCAOB report to ACSB includes: the failure to perform sufficient audit procedures to evaluate whether goodwill was impaired; the failure to perform sufficient audit procedures to evaluate the accounting for a transfer of buildings and related land use rights; the failure to perform sufficient audit procedures to test revenue; the failure to perform sufficient audit procedures to test accounts receivable; the failure to perform sufficient audit procedures regarding warrants; the failure to perform sufficient audit procedures to test the valuation of stock-based compensation; and the failure to evaluate the effect of reported material weaknesses on the nature, timing, and extent of substantive procedures performed in the audit of the financial statements. A detailed copy of this PCAOB report is in: http://pcaobus.org/Inspections/Reports/Documents/2011_Acquavella_Chiarelli_Shuster_Berkower_Co_LLP.pdf

-          On November 21, 2013, the United States Public Company Accounting Oversight Board (the "Board" or "PCAOB") issued an order censuring TIBET's Auditor Acquavella, Chiarelli, Shuster, Berkower & Co., LLP (ACSB), revoking ACSB's registration, and imposing a civil penalty in the amount of $10,000 upon ACSB. The Board is imposing these sanctions on the basis of its findings that ACSB (a) violated PCAOB rules, quality control standards and auditing standards in connection with the audits of three issuer clients; and (b) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients. For more on this order, click the link below:
-          On November 21, 2013, the United States Public Company Accounting Oversight Board (the "Board" or "PCAOB") issued an order censuring the Head of the Auditing Practices of ACSB, Mr. David T. Svoboda, CPA ("Svoboda" or "Respondent"), and barring him from being an associated person of a registered accounting firm. The Board is imposing these sanctions on the basis of its findings that Svoboda: (a) violated PCAOB rules and auditing standards in connection with the audits of three issuer clients and the improper creation, addition, and backdating of audit documentation prior to a Board inspection; (b) directly and substantially contributed to a registered public accounting firm's violation of PCAOB quality control standards; and (c) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients. For more on this Order click: http://pcaobus.org/Enforcement/Decisions/Documents/20131121_Svoboda.pdf
David Svoboda was the Head of the Auditor’s Public Companies Audit Practices. The PCAOB indicated that these sanctions that the Board is imposing on the Auditor and David Svoboda in this Order may be imposed only if a respondent's conduct meets one of the conditions set out in Section 105(c)(5) of the Act, 15 U.S.C. § 7215(c)(5). The Board finds that Respondent's conduct described in this Order meets the condition set out in Section 105(c)(5), which provides that such sanctions may be imposed in the event of: (A) intentional or knowing conduct, including reckless conduct, that results in a violation of the applicable statutory, regulatory, or professional standard; or (B) repeated instances of negligent conduct, each resulting in a violation of the applicable statutory, regulatory, or professional standard.


-    The above actions by the PCAOB against the Auditor clearly demonstrates how incompetent, negligent and unethical the Auditor is in performing its Auditing work.  As the same banned Audit Head Mr. Svoboda was responsible for Tibet’s Audit, the same act of negligence and recklessness is obvious thereby resulting in false and misleading financial information to be included in the IPO document.

August 30, 2014

  The Plaintiff's lawyer filings include the following interesting statements against the defendants. With respect to the $14.42 million in net proceeds from the IPO they were first deposited in an escrow account at SunTrust Bank in Virginia, which was set up by Defendant Anderson & Strudwick (“A&S”), the investment banking firm that underwrote the IPO and solicited Plaintiffs and class members to purchase stock in the IPO. ¶¶ 73, 133. A&S then transferred the funds to the HSBC bank account of Tibet’s Hong Kong subsidiary, China Tibetan, which is completely controlled by Defendant Zou. In order for the proceeds of the IPO to be transferred to Tibet’s operating subsidiary (and effectively Tibet), China Tibetan was required to submit an application with the PRC State Administration of Foreign Exchange or “SAFE”. Both Tibet’s SEC filings as well as records in the PRC of Tibet’s operating subsidiary confirm that this transfer of funds never occurred and that therefore all of the proceeds from the IPO should continue to remain in the HSBC bank account of Tibet’s non-operating Hong Kong subsidiary which is controlled by Defendant Zou. If the funds are not in China Tibetan’s bank account, then Zou is responsible for their disappearance.

Zou contends that the fact that he controlled the entirety of the proceeds of Tibet’s IPO is a “red herring” but does not say why this fact is insufficient evidence of culpable participation. Zou’s argument is defied by logic. Zou is the sole director of China Tibetan, which controls 100% of the stock of Yunnan Tibetan, Tibet’s sole operating subsidiary. In short, Zou controls all of Tibet’s operations. ¶23. Zou does not once mention that he is the sole director of China Tibetan. His silence as to the fact that he had 100% control over the entity which in turn had 100% control over Tibet speaks volumes. Importantly, China Tibetan is incorporated in Hong Kong. As explained in the Complaint, for international hybrids structured the way Tibet is structured, net proceeds from IPO’s are first deposited in an escrow account set up by the underwriters. Next, the IPO money is transferred to a Hong Kong bank account owned by the company’s Hong Kong subsidiary. ¶72. The net proceeds of the IPO- $14.42 million were transferred to China Tibetan’s HSBC account in Hong Kong. ¶74. This is corroborated by Tibet’s public filings. All of the proceeds of the IPO are in a Hong Kong bank account that is solely controlled by Zou. As China Tibetan’s sole director Zou is the only person with authority to approve any transfers or withdrawals of the IPO proceeds from China Tibetan’s bank account.

Zou was also an early investor in Tibet, who owned a significant amount of shares in Tibet prior to its IPO, and played a significant role in promoting the IPO by virtue of having entered into what the Prospectus calls a “Control Agreement” that gave Zou an ownership stake in Tibet. See Prospectus at page 39. The Prospectus describes Zou as an “early stage investor” who owned a total of 424,375 shares of Tibet with his brother through an investment company called Fulcan Investments. Zou also arranged for his company Fulcan Investments to provide legal services to Tibet in connection with the IPO.

By virtue of Zou's control over Tibet in his capacity as designee of the underwriter of the IPO, and as the sole director and controlling person of China Tibetan- which controls 100% of the stock of Chinese Tibet’s operating subsidiary and holds the proceeds of the IPO- Zou undoubtedly meets the requirements of a control person of Tibet triggering liability under Section 15.

Downs does not challenge that the Registration Statement contains a materially false statement or challenge the substance of Plaintiffs’ Section 11 claim. Despite being the lead investment banker responsible for overseeing the due diligence in connection with the IPO, Downs makes no mention of the due diligence (or lack thereof) performed in connection with the IPO. Indeed, the blatant failure to perform any reasonable due diligence whatsoever and instead rush the offering out the door so that the underwriters could pocket over a million dollars in underwriting fees is indefensible.

Citing no authority with regard to this clause of the statute, Downs addresses the propriety of his classification as a “person performing similar functions” in a footnote. He asserts that Tibet’s Board never met, because: 1) the Complaint does not allege that Tibet’s Board met and 2) because no SEC filings specifically reference board meetings. (MOL at fn. 11). First, the fact that the Complaint and SEC filings do not discuss board meeting proves nothing. Second, if it is true that Tibet’s Board never met this only underscores Downs’ culpability: how could Downs allow his name to appear in a Registration Statement and head a due diligence team of underwriters that signed off on the public offering of $16.5 million in stock to U.S. investors in a company so sub-standard that it did not even hold one board meeting in connection with its IPO? Putting aside the fact that the shameless lack of due diligence is only delineated by the fact that the IPO occurred without Tibet having a single board meeting, Downs cannot escape from the fact that the Registration Statement unequivocally grants him the power and influence to control Tibet’s affairs- including the IPO. Indeed, Downs’ failure to carefully exercise his duties weighs in favor of imposing liability on him for this fiasco.

Furthermore, if Defendants went ahead with the IPO without Tibet having a single board meeting this only underscores their egregious conduct. If Zou knowingly gave investors’ funds to a phantom corporation that had no active board of directors, his misconduct extends beyond a civil securities violation. Zou controlled the $14.2 million in proceeds from the IPO and he is responsible for their disappearance.

After SAG acquired A&S, A&S ceased to exist. “Successor liability may be found where two or more corporations combine through a merger or consolidation and the corporation or corporations that are merged cease to exist. As recognized under the de facto merger doctrine, an essential characteristic of a merger is that one corporation survives while another ceases to exist. SAG does not mention the fact that A&S ceased to exist after SAG purchased it, despite the fact that it was widely publicized. Indeed, Don Newlin, A&S chairman was quoted in an article in a local Richmond, Virginia business news website tellingly entitled “Anderson Strudwick Winds Down". Furthermore, the fact that A&S currently has no assets underscores that it ceased to exist after it was acquired by SAG. This is evidenced by the Notice of Chapter 7 Bankruptcy Case, entered in the Bankruptcy Court of the Eastern District of Virginia on June 19, 2014 after Defendant Downs file an involuntary bankruptcy petition under Chapter 7 of the Bankruptcy Code seeking to collect $361,026.55 from A&S.The Bankruptcy Notice instructs that any A&S creditor should not file a proof of claim because “there does not appear to be any property available to the trustee to pay creditors.

It appears that Acquavella’s audits of other public companies based in China were equally bad. On November 21, 2013 the Public Company Accounting Oversight Board (“PCAOB”) revoked Acquavella’s registration – effectively banning it from auditing public companies- and imposed a civil penalty on it. See PCAOB Release No. 105-2013-010, attached as Exhibit A to the Declaration of Laurence Rosen, filed herewith. The PCAOB stated that “the Board deems it necessary and appropriate, for the protection of investors and to further the public interest in the preparation of informative accurate and independent audit reports, that disciplinary proceedings be, and hereby are instituted…against [Acquavella].” The PCAOB stated that it was doing so based on Acquavella’s failure to comply with PCAOB rules, quality control standards and auditing standards. Id. at 2. In addition, David Svoboda, one of only two of Acquavella’s partners that worked on auditing its public company clients, was sanctioned by the PCAOB and barred from the accounting profession for not only violating PCAOB rules but for backdating and altering audit documentation to deceive the PCAOB’s inspector. See PCAOB Release No. 105-2013-011, attached as Exhibit B to the Rosen Declaration, at 1-4.

Acquavella’s Audit Opinion Was Itself A Materially False Statement. In addition to being liable for the statements they certified, Aquavella is also liable for its audit opinion, which is itself an inaccurate statement of material fact because, contrary to its certification, the financial statements Acquavella certified did not comply with GAAP. Acquavella makes the puzzling argument that its audit opinion cannot be considered an actionable material misstatement for purposes of Section 11 even if Tibet’s financial statements that Aquavella opined on as conforming with GAAP were in fact false.

Acquavella, in serving as Tibet’s auditor for fiscal 2010 and in issuing a letter allowing its certification to be included in the Registration Statement, had a duty make an adequate inquiry to Tibet and Tibet’s counsel regarding subsequent events. See, e.g. Ingenito v. Bermec Corp., 441 F.Supp.2d 525, 549 (S.D.N.Y. 1997) (auditor required to make reasonable inquiry concerning subsequent events up to effective date of registration statement). If Acquavella had done this it would have discovered the defaulted loans and the Bank Suit and could have (and was required to) withdraw its audit opinion from the Registration Statement. However, Acquavella’s liability is not premised on a duty to adjust or reissue its audit opinion based on “subsequent events.” Instead, Acquavella’s liability is premised upon its failure to conduct a reasonable audit in the first instance. Had it made a real effort to audit Tibet by confirming the status of the loans directly with the lender as PCAOB auditing standards require, Acquavella would have discovered that the loans were for $4.54 mm, not $3.54 million; that the loans were in default and that the lender had filed a lawsuit to collect on the defaulted loans.

Acquavella’s failure to discover the court judgment and the auction of Tibet’s assets during its audit of Tibet in late 2010 and January 2011 merely shows that Acquavella missed a second opportunity to rectify its audit failures.







September 3, 2014


All the Defendants filed their responses today and there was nothing in their filings that I would consider new or significant from their past deceptive stories and lies including not having any single board meeting throughout the IPO process and not influencing anything. Basically, they can be saying we never heard of TBET. Simply cruel, damning and incredible!. Some of the ludicrous responses directly from the Defendant Zou regarding the whereabout of the IPO money collected from USA investors are (note: copied verbatim from Zou's response). But more significantly, Mr. Zou’s purported control of the IPO funds is completely irrelevant to the determination of whether he is a proper Section 11 defendant. Section 11 focuses exclusively on misrepresentations and omissions in the Registration Statement.Nowhere in their Complaint or their Opposition do Plaintiffs allege that the Registration Statement contained misrepresentations or omissions regarding the IPO proceeds. Thus, the status and location of the IPO proceeds is nothing but a meaningless distraction created by Plaintiffs.
- Here, there are no allegations of Mr. Zou’s knowledge of the alleged misstatements or omissions in the Registration Statement. Instead, Plaintiffs again merely point to the Complaint’s conclusory and baseless allegations that Mr. Zou controlled Tibet and the IPO proceeds. Opp. at 13. However, as discussed above, the IPO proceeds and Mr. Zou’s alleged control over such proceeds is wholly irrelevant to the issue of whether the Registration Statement contains any material misstatements or omissions. Plaintiffs have alleged misstatements and omissions in the Registration Statement with respect to the financial condition of Tibet – not the location and control of the IPO proceeds; instead, in their Opposition, Plaintiffs attempt to impute Section 11 liability on Mr. Zou by focusing on their baseless and speculative allegations concerning the whereabouts of the IPO proceeds and Mr. Zou’s alleged control of such proceeds. Of note, Plaintiffs’ contention that Mr.Zou controlled the IPO proceeds is undermined by Plaintiffs’ own allegations. But in any event, the IPO proceeds and Mr. Zou’s purported control over such proceeds are completely irrelevant to the claims at issue. The Securities Act claims hinge on the existence, if any, of material misrepresentations and omissions in a Registration Statement and Mr. Zou’s involvement, if any, in such misstatements or omissions. Nowhere in their Complaint or their Opposition do Plaintiffs allege that the Registration Statement contained material misrepresentations or omissions regarding the IPO proceeds. Rather, the alleged material misstatements and omissions relate to the Registration Statement’s disclosures concerning Tibet’s overall financial condition. Thus, whether or not Mr. Zou knows the location of the IPO proceeds (he does not), or somehow controls such proceeds (he does not), is simply meaningless and an obvious distraction created by Plaintiffs to camouflage the meritlessness of their claims.

February 20, 2015

The Court has issued an order today and the Plaintiffs won the Motion to Dismiss. This is a great news for all shareholders. Now the Case can move to discovery and trial. Defendants MUST secure the IPO funds for full rescission with interest as required in Section 11 of the SEC ACT.

The following summarizes the Court responses to each Defendant including reasons for the denial:

Defendant SAG
SAG moves to dismiss Plaintiffs’ claims on the argument that Plaintiffs have failed to allege that SAG assumed liability for A&S’s role in the Tibet IPO. The general rule of corporate successor liability holds that a purchaser of a corporation’s assets “does not assume the liabilities of the seller merely by buying its assets.” Berg Chilling Sys., Inc. v. Hull Corp., 435 F.3d 455, 464 (3d Cir. 2006); see also Colman v. Fisher–Price, Inc., 954 F. Supp. 835, 838 (D.N.J. 1996) (same) (citing Ramirez v. Amsted Indus., Inc., 431 A.2d 811, 815 (1981)). The general rule against liability admits four limited exceptions: (1) when the purchaser expressly or implicitly agrees to assume the other company’s debts and obligations; (2) when the purchase is a de facto consolidation or merger; (3) when the purchaser is a mere continuation of the seller; or (4) when the transfer of assets is for the fraudulent purpose of escaping liability. Phila. Elec. Co. v. Hercules, Inc., 762 F.2d 303, 308–09 (3d Cir. 1985). SAG contends that Plaintiffs’ complaint fails to allege facts under which one of these four exceptions would apply. The complaint alleges only that SAG “acquired A&S and assumed all of the assets and liabilities of A&S.” (Am. Compl. ¶ 33.) Although this allegation is contested,3 this Court accepts it as true on a motion to dismiss. Accepting that SAG purchased all of the assets of A&S and assumed its liabilities raises “a reasonable expectation” that discovery may reveal additional evidence to find that SAG may be liable for A&S’s actions in the IPO under the exceptions for a de facto merger or mere continuation. See Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Moreover, this Court is not persuaded that the cases cited by SAG would counsel for dismissal on this ground. For example, in Westfield, LLC v. IPC, Inc., the court dismissed the plaintiffs’ claim because the plaintiffs pled only that the defendant purchased the assets of the prior corporation but failed to plead that the defendant “assumed the debts and liabilities” of the corporation—an allegation that Plaintiffs here have made. 816 F. Supp. 2d 745, 751 (E.D. Mo. 2011). For these reasons, SAG’s motion to dismiss is denied.

Defendant ACSB
ACSB makes a number of arguments to attack Plaintiffs’ claims against it. At this early stage in litigation, the Court finds ACSB’s arguments unavailing and denies its motion to dismiss. Plaintiffs bring claims against ACSB under Section 11 of the Securities Act of 1933, which provides a private right of action when “any part of the registration statement, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading.” 15 U.S.C. § 77k(a).4 To establish their Section 11 claim, Plaintiffs must show that Tibet’s registration statement “(1) contained an untrue statement of material fact; (2) omitted to state a material fact required to be stated therein; or (3) omitted to state a material fact ‘necessary to make the statements therein not misleading.” Cal. Pub. Employees Ret. Sys. v. Chubb Corp., 394 F.3d 126, 167 (3d Cir. 2004) (quoting 15 U.S.C. § 77k(a)).5 Plaintiffs allege that Tibet’s financial statement materially misrepresented Tibet’s financial position, including stating that Tibet had $27 million in assets (including $8.3 million in cash) and that Tibet owed $3.65 million on long-term loans as of September 30, 2010, when in fact Tibet had defaulted on a
$4.54 million undisclosed loan and was on the verge of bankruptcy. (Am. Compl. ¶¶ 48–51.) Plaintiffs further allege that the defaulted loan was the subject of a legal dispute before a Chinese court during 2010 and that the court entered judgment against a Tibet subsidiary on September 10, 2010. (Am. Compl. ¶¶ 52–56.) To be liable for a material misrepresentation or omission in a registration statement, a defendant must fit into one of five statutorily enumerated categories. See 15 U.S.C. § 77k(a). Plaintiffs allege that liability attaches to ACSB under the fourth category, which covers “every accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, who has with his consent been named as having prepared or certified any part of the registration statement, or as having prepared or certified any report or valuation which is used in connection with the registration statement, with respect to the statement in such registration statement, report, or valuation, which purports to have been prepared or certified by him.” 15 U.S.C. § 77k(a)(4).
ACSB argues that it cannot be held liable under Section 11 for the misrepresentations alleged above in the registration statement because an auditor may only be held liable for its own audit report—in other words, that Plaintiffs must allege that ACSB’s audit report itself contained material misrepresentations. Section 11, however, expressly imposes liability for misrepresentations in the financial statement on auditors who “prepare[] or certify[]” the registration statement, and Plaintiffs have alleged that ACSB certified the financial statements. (Am. Compl. ¶¶ 38–39, 94.) Moreover, the two primary cases ACSB cites in support of this argument, Deephaven Private Placement Trading, Ltd. v. Grant Thornton & Co., 454 F.3d 1168 (10th Cir. 2006), and In re IKON Office Solutions, Inc., 277 F.3d 658 (3d Cir. 2002), both
addressed auditor liability under other sections of securities law6—Sections 18(a) and 10(b) of the Securities Exchange Act of 1934, respectively—neither of which imposes liability on auditors for certifying financial statements as Section 11 does. Even were the Court to accept ACSB’s argument, Plaintiffs have also alleged that ACSB’s audit report stated that it was “conducted . . . in accordance with the standards of the Public Company Accounting Oversight Board” and that this statement was materially and objectively false: the complaint alleges that ACSB failed to exercise such appropriate professional care and judgment—for example, that ACSB did not verify basic information within the financial statement against Tibet’s bank statements, lenders, regulatory filings, or public records. (Am. Compl. ¶¶ 94–103, 105, 107.) See also In re IKON Office Solutions, Inc., 277 F.3d at 673 (an auditor’s certification represents that it “exercised appropriate, not flawless, levels of professional care and judgment” (citations omitted)). In short, Plaintiffs have alleged material and objective7 misrepresentations in sufficient detail to withstand a motion to dismiss.

Defendants Zou and Downs
Defendants Zou and Downs both move to dismiss the claims against them on the argument that they are not proper Sections 11 or 15 defendants.8 As noted above, Section 11(a) specifically enumerates five categories of potential defendants liable for misrepresentations in registration statements:
(1) every person who signed the registration statement;
(2) every person who was a director of (or person performing similar functions) or partner in the issuer at the time of the filing of the part of the registration statement with respect to which his liability is asserted;
(3) every person who, with his consent, is named in the registration statement as being or about to become a director, person performing similar functions, or partner;
(4) every accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, who has with his consent been named as having prepared or certified any part of the registration statement, or as having prepared or certified any report or valuation which is used in connection with the registration statement, with respect to the statement in such registration statement, report, or valuation, which purports to have been prepared or certified by him;
(5) every underwriter with respect to such security.

Plaintiffs assert that they have alleged facts sufficient to state a claim against Downs as an underwriter under the fifth category. The Securities Act defines an “underwriter” as “any person who has purchased from an issuer with a view to, or offers or sells for an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking.” 15 U.S.C. § 77(a)(11). Downs argues that, because the complaint alleges only that A&S functioned as underwriter for the Tibet IPO and does not allege the same for Downs, that he cannot be held liable as an underwriter under Section 11. Downs’s argument relies on too simplistic a reading of the complaint. Plaintiffs allege that Downs was a “Managing Director” of A&S and “one of the lead investment bankers who orchestrated Tibet’s IPO.” (Am. Compl. ¶ 35.) A&S, Plaintiffs allege, were underwriters in the Tibet IPO. (Id. ¶¶ 44–46, 73.) Additionally, Downs was listed in the registration statement and prospectus as an “observer” to the board of directors who may “significantly influence the outcome of matters submitted to the Board.” (Id. ¶ 35.)9 Downs’ reliance on In re Lehman Bros. Mortgage-Backed Securities Litigation is also misplaced. As Plaintiffs note, that court addressed whether ratings agencies, who participated in the structuring of mortgage loan pools, were properly alleged as liable underwriters. The Second Circuit affirmed the district court’s finding that plaintiffs “failed to allege that defendants ‘participated in the relevant’ undertaking: that of purchasing securities from the issuer with a view towards distribution, or selling or offering securities for the issuer in connection with a distribution.” 650 F.3d 167, 182–83 (2d Cir. 2011).
Plaintiffs’ allegations here, by contrast, suggest that Downs, in a position of control at A&S and a position of “significant[]” influence, if not control, at Tibet, was a primary actor in orchestrating A&S’ alleged underwriting of the Tibet IPO. In short, Plaintiffs have alleged that Downs participated in the underwriting. If these allegations cannot be borne out by the evidence, they will assuredly be dismissed at a later stage. Plaintiffs assert that they have alleged facts sufficient to state a claim against Zou as a “person performing similar functions” as a director under the second category. The complaint alleges that Zou, like Downs, was listed in the registration statement and prospectus as an “observer” to the board of directors who may “significantly influence the outcome of matters submitted to the Board.” (Am. Compl. ¶ 36.) Zou was also alleged to be the sole director of Tibet’s wholly owned Hong Kong subsidiary, China Tibetan. (Id.) The Court is not persuaded by Plaintiffs’ argument that a director of a subsidiary corporation is analogously functioning as a director of the parent as in In re Unicapital Corp. Securities Litigation where the court found that an individual named in registration statement as a soon-to-be director of a division of a company was a proper Section 11 defendant.10 149 F. Supp. 2d 1353, 1366–67 (S.D. Fla. 2001). A subsidiary is a legally distinct entity and not liable for the actions of its parent corporation. See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 341 n.44 (3d Cir. 2010). However, here, Plaintiffs have alleged that the subsidiary has played a key role in harboring proceeds from the IPO by detailing the typical process by which monies from an international IPO are transferred into China and citing statements from Tibet’s SEC filings that plausibly imply that China Tibetan (under the sole control of Zou) possesses the proceeds from the IPO. (Am. Compl. ¶¶ 72–82.)
These allegations, coupled with the naming of Zou in the registration statement and prospectus as an individual with “significant[] influence” over the Board, including the allegation that Zou was paid as any other board member, (Am. Compl. ¶ 36), plausibly allege that Zou’s role at Tibet was more akin to director than passive observer. Given these allegations, that he did not have voting power is not enough to dismiss the claims against him at this early stage of litigation.

CONCLUSION & ORDER
For the reasons stated above,
IT IS on this 20th day of February, 2015,
ORDERED that SAG’s motion to dismiss (Dkt. No. 102) is DENIED; and it is further
ORDERED that ACSB’s motion to dismiss (Dkt. No. 101) is DENIED; and it is further
ORDERED that Zou’s motion to dismiss (Dkt. No. 96) is DENIED; and it is further
ORDERED that Downs’ motion to dismiss (Dkt. No. 104) is DENIED.
IT IS SO ORDERED.
/s/ Hon. Faith S. Hochberg
Hon. Faith S. Hochberg, U.S.D.J.

February 15, 2015


SAG in its initial preliminary disclosure, identified the following people and entities:
Corporate representatives of SAG or its related companies who have knowledge relating to the Asset Purchase Agreement (“APA”) among Sterne, Agee & Leach, Inc., SAG, Anderson & Strudwick Investment Corporation and Anderson & Strudwick, Incorporated (the final two, collectively, “A&S”).
Current and former employees of SAG or its related companies that have knowledge of the facts and circumstances surrounding the APA, including but not limited to:

a. Damon Joyner
b. James Holbrook, Jr.
c. William Holbrook
Milton Turner – former board member of A&S, who has knowledge of the facts and circumstances surrounding the APA.
Don Newlin – former chairman of A&S (and current employee of Sterne Agee & Leach, Inc.), who has knowledge of the facts and circumstances surrounding the APA.
Todd Newton – former CEO of A&S, who may have knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.
George Nolde – former CEO of A&S, who may have knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.
Michelle Craft – former Chief Compliance Officer of A&S, who may have knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.
L. McCarthy Downs III – former employee of A&S, who has knowledge relating to the underwriting process for the Tibet Pharmaceuticals, Inc. initial public offering.


The Auditor (ACSB) in its initial preliminary disclosure, identified the following people and entities:
Joseph P. Acquavella - former managing partner of ACSB, may provide an overview of ACSB engagement with Tibet.
Mike Chan - former Auditor of ACSB
Santo Chiarelli - former partner at ACSB, may provide an overview of ACSB engagement with Tibet.
Bethanne Goens - former Supervisor/Manager at ACSB
Batsheva Granek - former Staff accountant at ACSB
Stanley Liang - former Auditor at ACSB
Smita Patel - former Auditor ACSB
Gene Rynkowski - former Supervisor/Manager at ACSB
David Svoboda - former Partner in charge of handling Chinese company audits at ACSB.
Gerry Tuch - former Quality Control at ACSB
Bei Wan - former Auditor at ACSB
Chris Wang - former Auditor at ACSB
Hayden Zou - Director of China Tibet
Hong Yu - Chairman of Tibet
Shuling Xie - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Gaoqing Ruan - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Ming Yu - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Benming Wang - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Xiuni Cai - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Zhene Chen - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Hongling Li - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Limin Sui - Shareholder of Shangri-La Tibetan Pharmaceuticals Inc.
Taylor Z.Guo - CEO, Tibet
Sabrina En - CFO, Tibet
Solomon Chen - Chairman of the Audit Committee of Tibet
L.McCarthy Downs III - former employee of A&S, who has knowledge relating to the underwriting process for the Tibet IPO.

Mr. Lewis McCarthy Downs III in his initial preliminary disclosure, identified the following people and entities:
Corporate representatives of Anderson & Strudwick (A&S) or its related companies who have knowledge relating to the issuance or underwriting and due diligence of the IPO of Tibet.
Former employees of A&S or its related companies that may have knowledge of the facts and circumstances surrounding Tibet, including but not limited to: Damon Joyner, Milton Turner, Don Newlin, Todd Newton, George Nolde, Michelle Craft, L.McCarthy Downs III.
Acquaelle, Chiarelli Schuster & Co. LLP, due dillgence of Tibet
Hayden Zou, Tibet IPO
Brad Hanneburg, underwriting counsel to A&S (formerly of Kaufman & Canoles P.C.)
Anthony Basch, Kaufman & Canoles, underwriter counsel
Anslow & Jaclin, LLP (law firm) due diligence
DeHeng Law Offices (Hong Kong/China), due diligence
Taylor Guo - CEO of Tibet
Hong Yu -COB and Director of Tibet
Sarina Ren - CFO of Tibet
Wenbo Chen - Director of Tibet
Youhang Peng - Director of Tibet
Solomon Chen - Director of Tibet
Trilogy Capital Partners - Investor Relations for Tibet.
Plaintiffs concerning the prices at which shares of tibet stock were purchased and any representations on which they claim to have relied.

On March 30, Defendants MUST fully respond to the Amended Complaint. The key information remains the safety and current location of the IPO Money, which can easily be verified through paper and digital trail from the Sun Trust Bank in Richmond Virginia where it was initially deposited to its current location.

March 24, 2015

The case was transferred last week from Judge Faith Hochberg to Judge Madeline Arleo (no reason was given). Judge Arleo has scheduled a telephone status conference on April 9 to discuss the status of the Case. The Defendants are expected to answer the Complaint on March 30th.


April 14, 2015

On April 10, the Court issued a Pretrial Scheduling Order which included several ORDERs including the following:


Fact discovery is to remain open through April 29, 2016.
Any unresolved discovery disputes (other than those that arise during depositions) must be brought before the Court no later than 6/12/2015.
The parties shall be limited to ten (10) depositions. No objections to questions posed at depositions shall be made other than as to lack of foundation, form or privilege.
The parties may serve interrogatories limited to twenty-five (25) single questions, aninitial requests for production of documents, as well as initial requests for admissions on or before 5/11/2015 to be responded to by 6/12/2015.
A telephone status conference shall be held before the undersigned on 11/6/2015 at 11:00A.M.
Since all dates set forth herein are established with the assistance and knowledge of counsel, there will be no extensions except for good cause shown and by leave of the Court, even with consent of all counsel.
Any motion to add new parties, whether by amended or third-party complaint, must be filed not later than 6/26/2015 and shall be made returnable on 7/20/2015.
Any motion to amend the pleadings must be filed not later than 6/26/2015 and shall be made returnable on 7/20/2015.
Any motion for class certification must be filed by 7/10/2015 and shall be made returnable on 8/3/2015.
All expert discovery shall be completed by 8/31/2016.
No expert shall testify at trial as to any opinions or base those opinions on fact not substantially disclosed in his or her report.
A final pretrial conference shall be conducted pursuant to Fed. R. Civ. P. 16(e) at a date and time to be assigned. Pursuant to paragraphs 14 and 15 of this Court’s form of Final Pretrial Order, all pretrial submissions must be served upon the Court forty-eight (48) hours prior to the final pretrial conference.
With respect to non-jury trials, each party shall submit to the District Judge and to opposing counsel proposed Findings of Fact and Conclusions of Law, trial briefs and any hypothetical questions to be put to an expert witness on direct examination.
The original of the Final Pretrial Order shall be delivered to Chambers not later than forty eight (48) hours before the pretrial conference, along with all pretrial submissions and trial briefs. All counsel are responsible for the timely submission of the Pretrial Order and submission.
FAILURE TO FOLLOW THIS ORDER WILL RESULT IN SANCTIONS PURSUANT TO Fed. R. Civ. P. 16(f) and Fed. R. Civ. P. 37.

s/ James B. Clark, III
JAMES B. CLARK, III
United States Magistrate Judge

May 8, 2015

The Court has again denied a second Motion to Dismiss the Case filed by the disgraced, unethical and reckless auditor Acquavella. This is the same Auditor that was banned by the USA Public Company Accountants Oversea Board (PCAOB).The disgraced and banned Auditor argued that a new Supreme Court Case (Omnicare v. Laborers District Council Construction Industry Pension Fund, 135 S.Ct. 1318 (2015) ) applied.



IT IS on this 5th day of May, 2015 ORDERED that Defendant's request to file a motion for reconsideration is DENIED.


/S Madeline Cox Arleo
Hon. Madeline Xox Arleo
United States District Judge

May 24, 2015

A Bankruptcy Court in Richmond Virginia recently issued a decision against Sterne Agee and reconfirms the successor-in-liability decision based on its acquisition of all the assets of Anderson & Strudwick, similar to the one issued in the ongoing Class Action Lawsuit. Another company Stifel Financial Corp. recently acquired Sterne Agee and as such the liability is transferred to Stifel based on the successor-in-liability order.

A local newspaper in Richmond Virginia published the news:

http://www.richmondbizsense.com/2015/04/27/years-later-lawsuits-and-debt-still-haunt-investment-firm-deal/

The Bankruptcy Case is in:

http://www.sacarbitration.com/SLAOnlineCases/2015_SLA/17/SLC_2015-17-06.pdf

Both the judges in Richmond and New Jersey have issued order holding Sterne Agee liable as a successor-in-liability. This is very good for TIBET victims as it further supports our Successor-in-liability argument against Sterne Agee. Interestingly, Mccarty Downs also filed a claim against Sterne Agee as a Successor-in-Liability. The United States Bankruptcy Judge's ruling indicate that the putative class in the Class Action lawsuit1 filed proof of claim in the amount of $21,591,945.21 on December 9, 2014 against Sterne Agee.


Stifel wants to buy Sterne Agee for $150 million. It is my understanding that Stifel has already been subpoenaed by ROSEN.

The Bankruptcy Court Case by the Court Appointed Trustee (Bruce E. Robinson) seems to be moving faster than the Class Action Lawsuit. This development is very postive for the victims of this scam.


These are some relevant sections of the Judge's Ruling:

The Counterclaim details that the Purchase Agreement and related documents and transfers constitute the transfers that are alleged to be fraudulent. The Counterclaim states the reasons the transfers are fraudulent, states that they were done with the intent to hinder, delay and defraud creditors, identifies the specified badges of fraud that support an inference of intent, and alleges that Sterne Agee actively participated in the fraudulent transfer and was on notice of the same.


The Trustee has standing to bring the successor liability claims against Sterne Agee because such claims constitute property of the bankruptcy estate. The Trustee has sufficiently alleged all necessary elements of his fraudulent transfer claim under 11 U.S.C. § 544(b) and Virginia Code § 55-80 and has pled sufficient facts to state a claim.


For the reasons set forth herein, Sterne Agee’s Motion to Dismiss is denied.


A separate order will issue.

Signed: April 8, 2015
/s/ Keith L. Phillips
United States Bankruptcy Judge


May 25, 2015

The Bankruptcy Court is moving the Case very fast. For online tracking of the Bankruptcy Case, go to the link below and search for either Sterne Agee Group or the Case Number: 3:14-ap-03175

https://www.inforuptcy.com/filings/search-court-filings?search_field=party_title&search_term=Sterne*%20Agee*%20Group*&filed_from=&filed_to=

May 31, 2015

Sterne Agee filed a motion on May 27, 2015 seeking for the Bankruptcy Court to withdraw, sever, transfer and consolidate the case with the Class Action Case in New Jersey. The speed at which the Bankruptcy Case is moving must have baffled Sterne Agee. For the plaintiffs, having seen the speed with which the Bankruptcy Court had moved this Case to discovery, denying Sterne's current motion would be a good news. The Trustee Lawyer's response to this current motion by Sterne would be due soon and we await it.

June 6, 2015


The Bankruptcy Trustee through his counsel filed a motion on June 5, 2015 seeking for the Bankruptcy Court to Compel Sterne Agee to Produce Documents Related To Stifel Financial's Purchase of Sterne Agee Group Inc's Asset on or before June 12, 2015,, and Motion to Expedite Hearing. The Trustee indicated that after several good faith attempts made to Stern Agee to provide the requested documents, the Trustee is seeking a Court Order to force Sterne Agee provide them including seeking a Court Order requiring Sterne to cover all the legal fees and expenses for filing the Motion. I like the speed of the Banktuptcy's proceedings and wished that the other Court in New Jersey would move at least half the speed.

June 8, 2015


The Bankruptcy Court's Judge issued an order today setting June 10 as the deadline for the Trustee to respond to the Motion of Withdrawal filed by Sterne Agee, and June 25 as the deadline for Sterne Agee to respond.

June 11, 2015


The Trustee's Counsel at the Bankruptcy Court filed a comprehensive response to Sterne Agee's motion to transfer the case to New Jersey so that it can drag on there for another five years. A trial date is set for October 5 -8, 2015 to decide the successor-liability Case.The state of Virginia also filed a claim against Sterne Agee based on outstanding tax liabilities owed by Anderson Strudwick from 1999 to 2010.

June 12, 2015

The Trustee filed a formal Notice of Bankruptcy at the New Jersey Court yesterday thereby triggering an Automatic Stay in all actions against the debtor Anderson & Strudwick. This is a positive development for TBET victims as it moves the Successor-Liability Case to the Bankruptcy Court which has proven to be more efficient and faster, and already has a firmed trial date set on October 5-8, 2015. Once the Trustee proves that Sterne Agee is liable,the claim of almost $21.5M filed by Rosen at the Court would be recovered from Sterne Agee as the successor-in-liability.


With the Automatic Stay, the other Defendants in the New Jersey Case including the reckless Auditor ACSB , except Anderson & Strudwick and Sterne Agee would continue the litigation.

June 18, 2015

Sterne Agee is desperate and looking for all available technical options to stay the proceedings at the Bankruptcy Court or move it to New Jersey where it knows it would drag on for years. Unfortunately the Trustee and his legal counsels are up to the challenges. Today, the Bankruptcy Judge issued a Pre-Trial Order specifying the Trial schedule and reconfirming the Trial for October 5 - 8, 2015. The best thing to happen to Tibet's victims is for the Bankruptcy Court to find Sterne liable as successor of A&S. Already, the Judge's Memorandum of Opinion clearly indicated that the Trustee has standing to bring the lawsuit against Sterne, and the allegations in the counterclaim against Sterne is more serious as it clearly includes Fraudulent Conveyance with sole intent to defraud creditors. Once Sterne is found liable, the Court appointed Trustees would get full recovery of the almost $22 million claim.

June 27, 2015

Sterne Agee brought new sets of lawyers from Alabama and filed another amended motion to sever the adversary proceeding and move it to New Jersey, notwithstanding that a trail date has being set already at the Bankruptcy Court. Instead of reaching out to the victims of this scam to seek settlement resolution, they are waging a legal battle they will never win because the badges of fraud against them on the fraudulent conveyance are compelling and backed by evidence as shown in the Judge's recent Memorandum of Opinion. The Trustee has to respond before July 9.

July 3, 2015


The Trustee responded to Sterne Agee's Motion to Stay Adversary Proceeding and Continue Trail dates and indicated that both the Trustee and Sterne Agee's Counsels have agreed to a short continuance of the trial in the Adversary Proceeding in December 2015, and as such expects Sterne Agee to withdraw the motion. The Trustee reiterated that the stay is not necessary because the claims against A&S and Sterne are currently Stayed in New Jersey pursuant to the Bankruptcy Code's automatic stay in 11 U.S.C.s 362. Also, the Trustee stated that there is prejudice to the Trustee and the Debtor's estate if this Adversary Proceeding, including the discovery process, is stayed because it delays the timely resolution of the Debtor's Bankruptcy Case.

July 29, 2015

The two pictures below are the Google Earth Satellite images of what used to be Tibet's sole operating factory location in Shangri-la taken on May 7, 2012 and November 21, 2014. The 2012 picture clearly shows the buildings inside the facility. The 2014 picture shows a complete demolition of all the buildings with an empty lot remaining at the site. The facility also vanished from the face of the planet like the directors and management.




2012 Photo showing the buildings



2014 Photo showing empty land with all the buildings demolished and removed


August 1, 2015

The Plaintiff Lead Counsel Rosen filed the Motion for Class Certification on July 10, 2015 at both the Bankruptcy Court and the New Jersey Court. The Lead Plaintiffs would be undergoing deposition next month in New York in support of the Motion for Class Certification.

August 13, 2015

The deposition of the Lead Plaintiffs started today. Based on the money transfer records received from SunTrust Bank, we know the exact HSBC account number holding the entire IPO money. We still believe as stated in the Amended Consolidated Complaint that the entire IPO money is safe & fully controlled by Hayden Zou in the HSBC Bank in Hong Kong. We have a very STRONG Case and it is just only a matter of time for Justice to prevail. The Trustee and his Bankruptcy Lawyers will start the Successor Liability Trial against Sterne Agee in two months.

August 16, 2015

The Plaintiff deposition is going very well and will continue this week. I encourage all victims to remain hopeful and positive as we have high confidence that the IPO money is in the HSBC Bank in Hongkong under Zou`s control.

August 24, 2015

The Bankruptcy Court issued a notice today that the hearing on the Motion to Compel Production of Document Related to Stifel Financial's Purchase of Sterne Agee Group Inc's Assets filed by the Trustee's Counsel would continue on September 14, 2015.

August 28, 2015

The PCAOB disgraced and censured Auditor ACSB has evolved into another entity called ACS with almost the same staff and Principals. The former PCAOB disgraced and banned Principal Auditor Mr. David Svoboda (https://www.linkedin.com/pub/david-svoboda/20/326/34b) who was responsible for TBET's IPO Audit is no longer with the new entity ACS.

All the five Lead Plaintiffs have concluded their depositions today with full participation of the Auditor's counsel.

Following the completion of the plaintiff's deposition, the Lead Plaintiffs now look forward to the deposition of the Defendants in particular ACSB and David Svoboda towards understanding whether all the deficiencies described below by the PCAOB during David Svoboda's time at ACSB also applied to Tibet:

  • the failure to perform sufficient audit procedures to evaluate whether goodwill was impaired; 
  • the failure to perform sufficient audit procedures to evaluate the accounting for a transfer of buildings and related land use rights; 
  • the failure to perform sufficient audit procedures to test revenue; 
  • the failure to perform sufficient audit procedures to test accounts receivable; 
  • the failure to perform sufficient audit procedures regarding warrants; 
  • the failure to perform sufficient audit procedures to test the valuation of stock-based compensation; and 
  • the failure to evaluate the effect of reported material weaknesses on the nature, timing, and extent of substantive procedures performed in the audit of the financial statements. 
  • the improper creation, addition, and backdating of audit documentation prior to a Board inspection; (b) directly and substantially contributed to a registered public accounting firm's violation of PCAOB quality control standards; and (c) violated Section 10A(g) of the Securities Exchange Act of 1934 ("Exchange Act") and PCAOB rules and standards in connection with the audits of two issuer clients. 
  • Outsourcing the audit to Chinese individuals with no formal training of PCAOB Auditing Standards. 

As most of the former Principals of ACSB are almost the same principals of ACS, and with ACSB no longer operating as a business, there is a compelling reason to assign ACS as the successor of ACSB. Lead plaintiffs are fully aware of this development and would seek justice in holding ACSB and its successors fully accountable for its roles as the IPO Auditor and financial gatekeeper.

September 11, 2015

I am encouraging all the victims of this merciless and cruel crime to go to the SEC Whistleblower's Site to submit online complaints periodically about the false and misleading IPO Prospectus and $3 fictitious buy-out offer through:

https://www.sec.gov/about/offices/owb/owb-tips.shtml

September 27, 2015

Defendants through ACSB's Lawyer filed a letter on September 17 requesting for a one week extension of time, from September 18 to September 25, to serve its opposition papers to Plaintiff's Motion for Class Certification; Plaintiff consented and both parties agreed that Plaintiff's reply be extended from October 5 to 19, 2015.


Till date, after more than three and half years, Defendants have failed to disclose the current location or status of the $14.4 million net IPO proceeds transferred to HSBC Account in Hong Kong. They have not disclosed to the Court or the SEC that it was stolen or not. Mr Hayden Zou and Mr. Mac Downs who were the key IPO players and significant Board Controllng insiders (by being Senior Board Observers of TIBET) should do the right thing by disclosing the status of the $14.4 million.

September 29, 2015

Defendants filed approximately 280 pages document in Motion against Class Certification. Rosen has to respond before October 19, 2015.

The Bankruptcy Trustee and Lead Plaintiffs reached a settlement agreement for $14 million, and a Motion seeking approval of the settlement agreement was filed yesterday. This agreement if approved would release Anderson & Strudwick and Sterne Agee. The Bankrupty Court had previously issued a memorandum of Opinion that there are sufficient badges of fraud to hold Sterne Agee liable for the liabilities of Anderson and Strudwick.

October 5, 2015

The Bankruptcy Trustee claimed that it had reached an agreement with Sterne ($2.25 M) that would basically release Sterne and ban all future lawsuits against Sterne Agee. The settlement amount is significantly less than the $14 million agreement the Trustee reached with Rosen. After deduction of Trustee fees, Trustee's counsel's fees & expenses, Rosen legal fees and expenses, paying other claimants; the Tibet victims would be harmed forever with insignificant recovery from Sterne. Rosen will be objecting before the October 7 deadline..

October 6, 2015

Rosen and his legal team filed a 100 page objection today against the worthless and damaging agreement reached by this Trustee and Sterne Agee. Clearly, the Trustee's motion demonstrated that they lacked Securities Law experience and financial resources to litigate the case in a Trial. Rosen indicated he would provide necessary support in a Trial because Securities Law is their specialty. How the Trustee reached this worthless agreement without thinking about the consequences to the creditors is baffling. Sterne acquired Anderson and Strudwick leaving a shell bankrupt company with no asset to pay its debts. How the Trustee could not see the significance of this intentional fraudulent conveyance that the Judge had previously acknowledged that there were sufficient badges of fraud is damning.

November 21, 2015

HSBC must cooperate with the Court to disclose the current account statement of the IPO money in Hong Kong. We are optimistic that it is possible that the criminal CEO Hong Yu was not able to execute his fraud and remit the $14.4 million to mainland China as there is no money transfer evidence we have seen till date that he was successful.

December 02, 2015


Rosen has filed the Motion to Compel HSBC provide the monthly account statement from January 2011 till present. HSBC must respond before January 4, 2016.


December 21, 2015

HSBC filed a Motion today opposing the Motion to Compel. Rosen to respond on or before January 11, 2016. HSBC stated in their motion that they've already completed extensive searches of their global banking records associated with Tibet's Hong Kong bank account number and have provided the wire transfer records associated with the account number to Rosen. However, Rosen is seeking a more detailed account statement showing all transactions and bank statements from January 2011 till present which they are opposing.












July 14, 2016


The following statement below is copied directly from Page 35 of the IPO prospectus:
"We will have an ongoing relationship with our Placement Agent that may impact our shareholders’ ability to impact decisions related to our operations.
In connection with this offering, we have agreed to allow our Placement Agent to designate two non-voting observers to our Board of Directors until the earlier of the date that:
(i) the investors that purchase shares in this offering beneficially own less than five percent (5%) of our outstanding shares; or
(ii) the trading price per share is at least four (4) times the offering price for any consecutive 15 trading day period.
Although our Placement Agent’s observers will not be able to vote, they may nevertheless significantly influence the outcome of matters submitted to the Board of Directors for approval. We have agreed to reimburse the observers for their expenses for attending our Board meetings, subject to a maximum reimbursement of $6,000 per meeting and $12,000 annually, which amount is not more than the reimbursement payable to our directors. The observer will be required to certify that such travel expenses are not reimbursed by any other party. We will also pay observers the same amount as our independent directors receive. As of the date of this prospectus, Mr. L. McCarthy Downs III and Mr. Hayden Zou are serving as our Placement Agent’s observers to our Board of Directors. See “Management – Board of Directors Observer.”

Here are some sections of Mac Downs deposition:

19 Q. What did you do in your capacity as an
20 observer to Tibet's Board?
21 A. Nothing.
... 
1 Q. So in Paragraph 27 it names defendant --
2 on page 7 it names Defendant Hong Yu. It says, Hong
3 Yu has been Tibet's chairman of the Board of Directors
4 since April of 2011 and served as Yunnan Tibetan's
5 chairman and CEO from 2000 to 2009.
6 Have you ever met Hong Yu?
7 A. I have not met Hong Yu.
8 Q. Have you ever spoken to Hong Yu?
9 A. I have not spoken to Hong Yu. I
10 understand he does not speak English.
11 Q. Okay. And Paragraph 28 names Defendant
12 Sabrina Ren, who served as Tibet's chief financial
13 officer since 2010. Have you ever met Sabrina Ren?
14 A. I have not Sabrina Ren.
15 Q. Have you ever spoken with Sabrina Ren?
16 A. No. She came on Board apparently after
17 the visit that we had.
18 Q. Okay. Paragraph 29 names Defendant Wenbo
19 Chen. Wenbo Chen has served as a Tibet director since
20 April 2010.
21 Have you ever met Wenbo Chen?
22 A. I have not.
23 Q. Have you ever spoken to him?
24 A. I have not.
25 Q. And Paragraph 30 names Defendant Youhang
Page 41
1 Peng. Defendant Youhang Peng has served as Tibet
2 director since April 2010. Have you ever met Youhang
3 Peng?
4 A. I have not.
5 Q. Have you ever spoken to him?
6 A. I seem to recall I made a telephone call
7 to him sometime during the transaction, but I don't
8 remember for certain if I got through to him, but I
9 did attempt.
10 Q. Do you know if Peng's principal place of
11 residence is in China?
12 A. I was told that Mr. Peng's principal
13 place of residence was in Texas.
14 Q. Okay. Do you know if Peng has a place of
15 residence in China at all?
16 A. I do not know that.
17 Q. Do you know if Peng is a U.S. citizen?
18 A. I was under the belief that Peng was a
19 U.S. citizen.
20 Q. Do you know if Peng files U.S. tax
21 returns?
22 A. I do not know.
23 Q. In paragraph 31 it names defendant
24 Solomon Chen. Defendant Solomon Chen served as a
25 Tibet director since April of 2010. Have you ever met
Page 42
1 Solomon Chen?
2 A. I have not.
3 Q. Have you ever spoken with him?
4 A. I have not.
5 Q. And so you stated that you met Taylor
6 Guo?
7 A. Yes, ma'am.
8 Q. And you met Hayden Zou?
9 A. Yes, ma'am.
10 Q. Did you meet any of the other directors
11 of Tibet?
12 A. I just answered that.
13 Q. Okay. But there's nobody else who was a
14 director of Tibet that you met with; is that correct?
15 A. That I personally met with, no, ma'am.

These are from the Zou’s deposition below :

7 Q. And these are China Tibetan
8 statements from January 2011 through August
9 2014.
10 When was this bank account opened?
11 A. I don't recall. Maybe sometime in
12 2000.
....
20 Q. Where did the money in this account
21 come from?
...
23 A. I really have no idea.
24 Q. So you controlled this bank account
25 and you don't know where the money came from?
....
14 Q. This account shows an opening
15 balance on February 12, 2011 which is at page
16 3. Total value of investment services
17 $32,614,233.79. That's also net position.
18 What does this balance reflect?
20 A. I don't have any idea.
21 Q. Then it looks like on August 13,
22 2014 which is at page 85, it says the net
23 position is 14,733.51.
24 So where was all the money in this
25 account moved to?
3 A. I really don't know.


Here, Sara was asking Zou about the more than US$4.1 million (i.e., $32,614,233.79 Hong Kong dollars)that was transferred on January 26, 2011 into the account Zou created in 2000 & owns, and Zou blatantly denied not knowing where the money was moved to.

The remaining balance of the transfers he did in Feb to May 2012 were intentionally not disclosed in the bank statements he submitted to Rosen. We have requested for these missing bank statements and we are yet to receive them from Rosen.

Also, we have asked Rosen to inquire from Zou why $3,044,000 was moved to Damient Ltd and have not yet received any response.

In addition to controlling most of the IPO money, Zou also dumped all his 423,375 shares through insiders knowledge of the scam in 2012. Not just dumping only his own shares, he sold all shares controlled by his brother and his company Fulcan LLC.

These are important factual evidences of culpability. 


These are continuations of Zou’s deposition :

2 Q. Do you see where it says, In
3 connection with this offering.
4 So it says, In connection with this
5 offering, we have agreed to allow our
6 placement agent to designate two nonvoting
7 observers to our board of directors until the
8 earlier of that date, that the investors that
9 purchased shares in this offering
10 beneficially own less than 5 percent of our
11 outstanding shares or the trading price is at
12 least four times the offering price for any
13 consecutive 15-day trading period.
14 Neither of those events ever
15 happened at Tibet, correct?
16 A. I don't know, the first one.
17 Q. I will represent it didn't.
18 Then it says, Although our
19 placement agents observers will not be able
20 to vote, they may nevertheless significantly
21 influence the outcome of matters submitted to
22 the board of directors for approval. We have
23 agreed to reimburse the observers for their
24 expenses for attending our board meetings
25 subject to a maximum reimbursement of $6000
...
2 per meeting and $12,000 annually, which
3 amount is not more than the reimbursement
4 payable to our directors. The observer will
5 be required to certify that such travel
6 expenses are not reimbursed to any other
7 party. We will also pay observers the same
8 amount as our independent directors receive.
9 As of the date of this prospectus, Mr. L
10 McCarthy Downs III and Mr. Hayden Zou are
11 serving as placement agent's observers to our
12 board of directors.
13 The placement agent is Anderson &
14 Strudwick, correct?
15 A. Yes.
16 Q. So why did Anderson & Strudwick
17 designate two observers to the board of
18 directors?
..
20 A. I don't have any idea why.
21 Q. So why were you designated as an
22 observer to the board of directors?
...
24 A. I really don't know. It's a
25 mistake.
...
2 Q. It's a mistake?
3 A. I am in this case right now, I
4 think it's a mistake.
5 Q. Did you consent to your being
6 designated as an observer?
7 A. It must be so.
8 Q. But do you recall having consented?
9 A. I don't recall but my name is
10 there.
11 Q. Do you know who made the decision
12 to designate you as an observer?
13 A. I don't recall but if my name is
14 there, I assume it must get my consent.
...
16 Both of us want you to tell for the
17 record what you remember.
18 Q. So you participated in
19 incorporating the company and you
20 incorporated a company previously. And you
21 are familiar with the process of public
22 offerings in the United States, is that
23 correct?
24 A. Somewhat familiar yeah.
25 Q. And you did not read the
...
2 prospectus?
3 A. It's normally 100, 200 pages
4 prospectus, so normally I don't read it.
5 Q. And did you know that your name was
6 in the prospectus?
7 A. Yes, for being an observer, I must
8 know my name is there.
9 Q. What does an observer do?
10 A. I really don't have any idea. It's
11 just observing the board.
12 Q. But it says that you can exert
13 significant influence over the board?
14 A. I mean, what influence can an
15 observer give to the board, you are just an
16 observer. You held no voting rights, you
17 cannot vote, you cannot veto, so it's just an
18 observer.
19 Q. Why was McCarthy Downs designated
20 as an observer?
22 A. I don't have any idea.
23 Q. And did Tibet's board members speak
24 with you about being designated as an
25 observer?
2 A. No.
3 Q. Prior to the IPO, did you have any
4 conversations with Tibet's CEO and other
5 board members?
...
8 Q. Did you have any conversations with
9 the CEO prior to the IPO?
10 A. Yes.
11 Q. What was discussed during those
12 conversations?
13 A. I don't remember, I don't recall.
14 Q. So you helped incorporate this
15 company but you didn't know that you would
16 have any responsibilities in connection with
17 the IPO?
...
19 A. I always believe I had no
20 responsibilities to the IPO.
21 Q. So if these observers couldn't
22 vote, what was the purpose of having the
23 observers?
25 A. I have no idea.
...
2 Q. It says that you are able to
3 influence matters that are submitted to the
4 board of directors.
5 What matters did you influence?
6 A. I never seen -- I have never seen
7 any matters shown to me so I don't know if
8 there is any matter submitted to the board or
9 not.
10 Q. So do you know if Tibet had any
11 board meetings?
12 A. I don't remember if they have any
13 meeting.
14 Q. Did you find it strange that Tibet
15 didn't have any board meetings?
16 A. I don't know. It's their business
17 decision, it's not mine.
18 Q. So you invested money in this
19 company and you weren't concerned about the
20 board's behavior and operations?
21 A. Of course you invest your own
22 money, you are concerned, that's true, you
23 are concerned, but board meeting, I don't
24 know, is that going to make a difference.
25 Q. So you think that a public company
2 that runs without having any board meetings,
3 that's not something that concerns you, as
4 somebody experienced in equities as you
5 testified, and investing?
7 A. I just didn't follow that closely,
8 where I never pay attention to them whether
9 they have a board meeting or not.
10 Q. How much money did you invest in
11 Tibet, I know it's in the prospectus?
12 A. We invest close to 200,000.
13 Q. And you invested that money with
14 Philip Zou, correct?
15 A. I'm just talking about my part.
...
3 Q. Did you think that U.S. investors
4 would be more likely to invest in a company
5 that had someone like McCarthy Downs as an
6 observer on the board?
7 MR. GUNNELL: Objection.
8 A. I don't know.
9 Q. But you wanted this IPO to be
10 successful, correct?
11 A. Well, I invest my money, so of
12 course.
13 Q. Who decided you should be
14 reimbursed $12,000 annually for your service
15 on the board?
17 A. I have no idea. I didn't
18 participate in the decision.
19 Q. Do you know why this amount was the
20 same as directors would be reimbursed if you
21 were just an observer?
22 A. No, I really never pay attention to
23 it.
24 Q. Were you concerned that your role
25 as an observer could subject you to the same
3 MR. GUNNELL: Objection. Calls for
4 a legal conclusion.
5 A. I just didn't know the liability of
6 being an officer, otherwise I won't either, I
7 won't allow to put my name there.
8 Q. Were you paid anything in
9 connection with being an observer?
10 A. No.
11 Q. You were never compensated?
12 A. I never receive compensation.
13 Q. Did you ever resign from the board
14 as an observer?
15 A. No, I didn't know I need to resign.
16 Q. So you never resigned?
17 A. Yeah, I didn't know I need to
18 resign from as an observer.
19 Q. Do you know if McCarthy Downs ever
20 resigned?
21 A. I don't know either.

July 15, 2016

The following names  and addresses of individuals and entities associated with Tibet  were published in the leaked Panama Papers below:

https://offshoreleaks.icij.org/nodes/10134010



                                                           (Click on image to expand)


Downs and Zou filed their motions for summary judgement on June 30, 2016.

  • There is nothing in their recent Motion  that frees them from the fact that they failed miserably as Board Observers. How two men that claimed to be very experienced in IPO would serve as Board Observers and play a significant role in the IPO without ever MEETING OR TALKING to any of the Board of Directors from 2009 to 2012 is inexplicable and incomprehensible.  
  • How Mac Downs and Hayden Zou as Board Observes would not care to verify whether Tibet was a Phantom company with inactive board is mind boggling even in the midst of all the red flags they had described or suspected before the IPO in their filings including red flags about Tibet’s outstanding bank debts. 
  • Mr Hayden Zou in his Deposition indicated that he opened the Hong Kong account in 2000 but could not explain where the $4.1 million deposited in his China Tibetan account came from and where the money went to.
  • Zou’s failure to account for the $4.1 million deposited into his China Tibetan Account including failure to disclose the account statements for Feb to May 2012 period demonstrates that Zou still controls at least $4.1 million of the IPO money.
  • Zou also intentionally refused to disclose China Tibetan's bank statements from February to May 2012 that would further prove that he transferred the remaining balance of the IPO money  to his China Tibetan Account. Till date, after repeated request, Zou refused to disclose these missing bank statements.
  • Zou refused to disclose why more than $3 million was wired to Damient on Jan 26, 2011, two days after the IPO.
  • What is so incriminating and damning is that while Zou could not perform his role as a Board Observe nor cared to meet or talk to Tibet directors even when the auction was disclosed in February 2012 , it never stopped Zou from quickly dumping all his 424,375 shares to the unsuspecting public thereby further proving the ruthlessness, bad faith act, negligence and cruelty of Zou. 
  • Zou’s quick dumping of his shares while refusing to meet or talk to the directors in the midst of the auction deserves punishment. It demonstrates gross negligence and bad faith act that was intentional. Zou as a Board Observer quickly ran to cash-out his shares while blatantly refusing to perform his role as a Board Observer  including meeting and talking to Tibet directors about the auction.
  • Mac Downs visited China but stated he never met any director of Tibet. Nothing in Down’s filings showed that he met or talked to any of Tibet’s directors before and after the IPO nor performed his role as a Board Observer between 2009 and 2012. There is no question to the indisputable fact that the IPO Prospectus clearly stated that Mac Downs would significantly influence matters submitted to Tibet Board. This was a factual statement in the IPO prospectus that was comforting to many USA investors including the plaintiffs. Down’s failure to either perform his role or meet or talk to any of the directors demonstrates gross negligence and bad faith act that are not expected from an Investment Banker with more than 30 years of experience. Downs culpability deserves Punitive measures against him as Down’s demonstrated beyond reasonable doubt that the Board Observer’s role was a sham and nothing but a deceptive tactics used to lure the unsuspecting public from purchasing shares of Tibet as both Downs and Zou did nothing as Board Observers. If Downs or Zou had either met or talked to any of the Directors, they would had realized that Tibet was a phantom bankrupt corporation with inactive board.


July 24, 2016

Here are Donald Trump's videos about the American Rigged System.


https://www.youtube.com/watch?v=auviMog1zNI


https://www.youtube.com/watch?v=TExdmFEETPQ


Anyone who had passed through and witnessed this corrupt system would understand the truth Donald Trump is saying about how rigged the system is against the citizens. When a USA Law Court dismissed compelling HSBC from disclosing the IPO  Bank Account holding funds belonging to innocent American citizens who were victims of fraud,  it is the climax of a rigged corrupt broken system. A system that encourages frauds in the securities exchange. A system that the Securities Laws are designed to protect the criminals with no consequences for the Pains and Sufferings caused to innocent victims. A system that the Securities enforcement agency called SEC is simply useless. Totally rigged!!! Thank you Donald Trump for speaking about it many times. I am a witness to this rigged system.



September 3, 2016


Here are some of recent events:
  • Youhang Peng filed motion to dismiss. 
  • Downs and Zou filed  Motion for summary Judgement seeking dismissal.
  • Rosen filed a detailed and comprehensive responses to Downs and Zou's Motion for Summary Judgement opposing dismissal and seeking Jury Trial. 
  • Rosen applied to the Court to expedite the approval of the $2,075,000 settlement  with ACSB.
  • Sterne Agee's settlement with the Trustee is still pending finalization!!

After numerous complaints submitted to the SEC and FINRA by several of the victims, these USA Agencies have failed till date to commence any proceedings against the people and entities behind this brazen and malicious IPO fraud including the fictitious buy out offer, and to hold them accountable for their actions.


November 26, 2016

The Judge issued an order on Nov. 18  requesting for additional clarifications on ACSB's settlement. Rosen has 21 days to respond. These are some pending events:

  • Awaiting Court Order on Peng's Motion to Dismiss
  • Awaiting Court Order on Downs and Zou's Motion for Summary Judgement
  • Awaiting Court Order on Rosen's Motion to access Tibet IPO Hong Kong Bank Account through Hague Convention process.
  • Awaiting processing of Sterne Agee Settlement.

The Case is now nearing 5 years and the following are now clear:

  • Approximately $3.1 million was transferred two days after the IPO on Jan 26, 2011 to an account owned by an entity called Damient Limited.
  • Zou & Downs never met with Tibet's Directors per their court filings till date except meeting with Yu Hong and Taylor Guo. All their filings till date indicates that they never met the Chinese Directors even when they went to China which can effectively prove that either these Chinese Directors were fictitious characters created from Thin Air or that Zou and Downs for some reckless reasons could not see it to be abnormal to register the IPO of a Chinese Company for USA Citizens to invest without ever talking to or meeting any of the so called Chinese Directors. 
  • While Zou could not perform his Board Observer role or meet with the Directors, it did not stop him from dumping his shares and never filed any SEC disclosures for such shares transaction even though he was an insider of Tibet.
  • Zou has refused to provide the bank account statement of China Tibetan for the critical periods of February to May 2012. Plaintiffs believe that these missing bank statements would shed more light into the money transfers that took place after the fraud was exposed on Feb 17, 2012. Zou provided other bank statements but intentionally withheld the bank statements for these missing critical months in 2012.

Jan 1, 2017

The Judge issued an Order on Dec 29, 2016 approving the $2,075,000 settlement with the Auditor ACSB. Class Members in the Sterne Agee settlement would be automatically included in this settlement unless they opted out. As Strategic Claim Services already have a comprehensive claimants database, it is expected that this claim processing would be faster and more efficient.

Jan 18, 2017

The Judge issued an Order approving the Request for Letters Rogatory that would enable HongKong Court provide judicial assistance to Rosen regarding the account statements from HSBC HongKong.


April 19, 2017

After almost 5 years in this fraudulent mess, the Judge issued an Order dismissing the civil case against Youhang Peng, without prejudice. Youhang Peng was a member of Tibet's Audit Committee and received financial payment from Tibet as was disclosed in the HSBC Wire Transfer Statements. Youhang Peng also served as Director of Tibet and currently resides in USA. Youhang Peng claimed that he was not properly served by Rosen, and as such the Judge decided not to hold him accountable for this cruel crime due to a technical jargon called status of limitation. Plaintiffs are evaluating their options as at this time. Youhang Peng is the only remaining defendant who can tell the victims what happened to the $16 million raised in the IPO as both Mac Downs and Hayden Zou, ACSB & Sterne Agree had declined to provide the answer.


April 20, 2017


As all the Directors, officers and management staff of Tibet had absconded or resigned over the past years, and are no longer serving the company, some of the existing shareholders are considering the following future plans in order to revamp the company:


  • Plan to organize a shareholder meeting to appoint new Management and Directors.
  • Plan a new business focus for the company. One sector currently on top of the plan is the Marijuana Sector. The new business would focus on exploring opportunities in the revolutionary Marijuana Sector in USA and Canada. For USA, the focus would be in states where Marijuana is legalized. Canada is legalizing the recreational use of Marijuana in July 2018. The new company would look at growing through acquisition of existing licensed or pre-licensed private companies in USA and Canada, dispensaries and retail outlets. 
  • Plan a new business name for the company. Right now, several names are being considered and the one on top of the list is Global Marijuana Growers Inc.
  • Plan to obtain a new Stock symbol for the new Company.
  • Plan to regain annual and quarterly reporting status with the SEC including meeting all compliance requirements that will eventually lead to an upgrade in the exchange listing.
These are forward looking plans by some of the existing shareholders who owns more than 25% of the 3 million IPO shares. These tentative revamping plans may or may not materialize and may take considerable time and resources to complete, and as such should not be relied upon. 

May 10, 2017


The Judge issued an order today denying Downs & Zou's Motion for Summary Judgement with regards to Section 11 and due diligence liabilities. Plaintiffs are happy with this Order as they look forward & prepare for trial. The trial schedule will be announced when completed by the Court.


THE ONLY THING NECESSARY FOR THE TRIUMPH OF EVIL IS FOR GOOD MEN TO DO NOTHING

Summary of Key Events and Timelines:

January 18, 2010: Agricultural Bank of China filed a law suit against TIBET's main operating entity in China YSTP for the repayment of three long overdue loans which were all secured by the entire assets of YSTP.

July 20, 2010: A trial was held and YSTP made no court appearance.

September 10, 2010: The court entered a judgement ordering YSTP to pay Agricultural Bank of China around $4.5 million in principals and interest within 60 days. Interestingly, during this period, TIBET' SEC Prospectus Registration process was going on.

January 10, 2011: YSTP failed to pay the loans. The court on this day issued an Enforcement Order freezing all the assets of YSTP. This material event was never disclosed anywhere in the IPO prospectus. All these court events were occurring at the same time that the IPO Registration was happening with the SEC.

January 18, 2011: TIBET issued its IPO Prospectus and accepted by the SEC.

January 24, 2011: IPO money $14.4 million deposited in HongKong account

January 26 2011: $3.044 million wired to Damien

 January 26, 2011: $4.1 million transferred to China Tibetan controlled by Hayden Zou.

January 28, 2011: TIBET started trading in NASDAQ.

June 6, 2011: Mr. Taylor Guo was terminated abruptly as CEO but remained as Director. This happened approximately 4 months & 1 week after IPO started trading in NASDAQ.

September 12, 2011: Auditor resigned abruptly and offered no adverse opinion on past auditing work.

October 11, 2011: Sherb & Co appointed as new Auditor.

November 15, 2011: Third quarter earnings conference call. TIBET indicated they have not yet utilized the IPO money as they were evaluating an acquisition target. The last 10Q quarterly report for period ending September 30, 2011 shows that the IPO money is still in the Cash section of the Balance Sheet.

February 17, 2012: Auction site announced auctioning of TIBET assets in China.

February 27, 2012: Having realized the game is about to end, the criminal CEO Yu Hong immediately announced a fictitious go-private offer and said the company would investigate the auction. No investigation was ever completed by the directors. The company went dark from this date and stopped communicating with regulators and shareholders.

March 30, 2012: TIBET failed to file the audited 10K annual report for 2011.

April 3, 2012: Stock halted by NASDAQ. Additional information requested by NASDAQ.

April 5, 2012: ROSEN Law firm announces that it would start investigation of TIBET.

April 27, 2012: Having failed to respond to NASDAQ, stock was delisted from NASDAQ.

May 25, 2012: Class Action Lawsuit Complaint filed in Virgin Island Court. TIBET's Directors and Officers were properly served and summoned by the court alongside other defendants. Till date, the past and present CEOs Yu Hong and Taylor Guo, CFO and Directors have refused to respond to the Court summon and complaint.

July 4, 2013: Hayden Zou, one of the IPO Underwriter Agents and TIBET's Board Observer submitted a sworn affidavit to the USA Virgin Island Court stating that "to the best of his knowledge, TIBET Directors never held a Board Meeting". Incredible & mind boggling!!!!

November 21, 2013: The USA Public Company Accounting Oversight Board (PCAOB) fined, censured and barred TIBET's IPO Auditor for reckless and negligent auditing practices for other three Chinese companies based on the Board's inspections completed in 2009 and 2010, the same time period that the disgraced Auditor was auditing Tibet. Tibet's IPO Auditor was barred for two years by the PCAOB. Additionally, a former partner of the firm David Svoboda was barred for three years by the PCAOB for intentional unethical acts of creating and backdating audit documentations before the Board's inspections thereby failing to act independent of the issuer as required in the Auditing Standards. In other words, instead of acting as the independent financial gatekeepers of these public Chinese companies, they were intentionally creating and backdating audit documentations to aid these Chinese companies evade scrutiny.

May 1, 2014:  Judge issued an Order Denying Defendants Motion to Dismiss. The Case is transferred to the District Court of New Jersey as requested by all parties.

June 6, 2014: Case assigned to Judge Faith S. Hochberg and Magistrate Judge Michael A. Hammer.

June 19, 2014: Court approved defendants request to extend time to respond to the amended consolidated complaint from June 17 to July 7, 2014.

July 7, 2014: Defendants filed motion to dismiss.

August 18, 2014: Plaintiff responded to Defendants motion to dismiss

September 3, 2014: Defendants filed their last responses.

October 27, 2014: Court kept discovery schedule on hold pending outcome of Motion to Dismiss.

February 20, 2015: Court denied Defendants Motion to dismiss

March 12, 2015: Defendants issued initial disclosures, Hayden Zoe did not.

March 17, 2015: Case transferred from Judge Hochberg to Judge Arleo.

March 30, 2015: Defendants issued response, Hayden Zou did not.

April 8, 2015: Virginia Bankruptcy Court denies Sterne Agee motion to dismiss.

April 10, 2015: Pretrial schedule issued by Magistrate Judge

May 1, 2015: Hayden Zou filed initial disclosures and response.

May 5, 2015: District Judge Arleo denied Acquavella's Motion to Reconsider Dismissal.

July 10, 2015: Rosen filed Motion for Class Certification

August 13, 2015: Deposition of Lead Plaintiffs by Defense Counsel commence

August 28, 2015: Plaintiff's deposition concluded

October 5, 2015: Trustee reached agreement with Sterne Agee, 

December 29, 2016: Judge approved ACSB $2,075,000 settlement.

May 10, 2017: Judge denies Downs & Zou summary judgement on Section 11 liability.





Extra Reading

Read my other blog on China Stock Fraud at: http://chinastockfraud.blogspot.ca/


OLD Comments


170 comments:



  1. Replies
















    1. I would like to speak by phone with EOIM regarding the lawsuit. I don't want to discuss this matter on a public website. Can you contact me by email at jukkapekkabarry@gmail.com?
      Delete
    2. This comment has been removed by the author.
      Delete
    3. The nonbinding deal is only a partial victory for the United States

      http://www.reuters.com/article/2013/05/24/us-usa-auditing-china-idUSBRE94N0VO20130524
      Delete

  2. This comment has been removed by the author.
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    1. eoim2012,

      We had all ready contact through email i send you another mail.
      Greetings,
      Delete

  3. No news about the meeting 28 nov.?
    ReplyDelete
  4. Is there some more news avalible about the court?
    ReplyDelete
  5. Still waiting for new updates from court.
    ReplyDelete
  6. Wow.Very impressed with the thorough followings on this TBET case. Would you recommend holding on to my TBET shares. They are wothless now, but could sell them at anytime for a tax loss
    ReplyDelete
  7. i think its not a good idea to sell at this price.
    As long as there is no prove its fraud there is hope.Remember the last sec.filling.Hoping for some update from the court.
    Have to wait until the class action is over just like HQSM.
    ReplyDelete
  8. This comment has been removed by the author.
    ReplyDelete
  9. Good questions, like to have them answered.
    ReplyDelete
  10. Hi

    I'm not american and I'm not familiar with class action.

    One year ago, I've gave my information to Rosen Law (number of share,...).

    Can I take part of the Class Action ?

    Thx
    ReplyDelete
  11. Why not go after the NASD for listing this company? Has this been investigated? This is the big pocketed entity that could/should make TBET shareholders whole. How can I buy any future NASD IPO when it appears they don't do their due diligence!

    Previously I was upset with NASD for the way they handled the delisting. Now I am incensed at their handling of the IPO and delisting.
    ReplyDelete
  12. Thank you for the continuing updates
    ReplyDelete
  13. What this company has done has caused near complete financial ruin for me and my wife. Aside from the return of the money invested, my only other wish is for them to feel all of the pain they have dealt.
    ReplyDelete
  14. Stephen, The people behind this crime does not have any soul or empathy and should not be considered human beings. No amount of financial settlement would be compared to seeing Jury found them guilty.
    ReplyDelete
  15. This was not a chance crime. It was a planned crime.
    ReplyDelete

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    1. It was a planned crime right from the very beginning.
      Delete

  16. "This was not a chance crime. It was a planned crime. "
    Absolutely agree

    Val - Bulgaria
    ReplyDelete
  17. Any September updates EOIM? It's been almost a month since your last post.
    ReplyDelete
  18. It seems that similar class action settlements have only awarded amounts around 10 to 15 cents per share with limits per shareholder of $1500. Would it be reasonable to expect the same small award against TBET. If so would anyone else be interested in pursuing a jury settlement? How would this be accomplished?
    ReplyDelete
  19. Nats, Some of us already have Plan B that would be triggered if a fair justicthat would result in 100% recovery of damages plus interest plus inflation adjustment e is not provided. You can join us if there is need to proceed with Plan B. As at now, we are waiting for the Class Action to play out. This is a Slam Dunk Case and full rescission of the IPO plus potential Punitive Damages Award is needed for justice to prevail.
    ReplyDelete
  20. No update except waiting for Court's ruling on the motion to dismiss. Once there is a decision, defendants would have 20 days from the date of the order to respond to the complaint. Hopefully, we would ger answers from these tyrants.
    ReplyDelete
  21. I would be interested in pooling resources to further "Plan B". However, would a statute of limitation apply after two years?
    ReplyDelete
  22. Good question Nat. The US Securities Law places the statute of limitation on hold during class action. I asker my personal lawyer the same question and that was her response. So you can pool resources ifwe dont get fair justice from class action which historically is a joke!!. If you are serious about pooling resources with us, you have to contact me as soon as you are given the option to Opt Out from the Class Action. If you fail to formally opt out within the specified date, you would be bound to sign a release form thereby losing your rights for life to sue and gets justice.
    ReplyDelete
  23. I would be interested in pooling resources to further "Plan B" too.
    ReplyDelete

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    1. NYSE, Send me email at eoim2012@yahoo.ca indicating how many shares you own.
      Delete

  24. I would also be interested in "Plan B" if no reasonable settlement is reached.
    ReplyDelete

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    1. Sounds good. I am keeping an emai record of those that have so far contacted me. Just send me email stating how many shares you own at eoim2022@yahoo.ca
      Note that it is @yahoo.ca and not .com.
      Delete
    2. I would be interested in Plan "B" I own 15000 shares now but have owned as many as 35000 shares with a total realized loss of over $40000. I also have friends with huge losses who may be interested. Please respond to jpe595@aol.com
      Delete
    3. Due to the huge responses we have received, we have decided to expand the Plan B Group to a maximum of 10 people sharing the legal cost at $30 per hour.
      Delete

  25. Hi EOIM2012 - quick question, would Plan B benefit all shareholders or only those that were involved in the 3rd party lawsuit? Although, I would be interested as well, I would imagine that it would most beneficial to the largest shareholders.
    ReplyDelete
  26. If the Class Actio resulted in unfair settlement, those shareholders who accepted the settlement offer would be required to sign a Release form bounding them from ever sueing the defendants again. However, shareholders who felt that the offer is is unfair MUST opt out in order to have the right to sue in the Plan B Group. Once you opt out, you will not be bound and as such can join others to seek justice through Jury Trial.
    ReplyDelete
  27. If the settlement is unfair, this might mean that the bulk of Tibet's IPO cash remains in the company's bank account. Shareholders might be able to call a shareholders' meeting in the US and vote to distribute the cash to current non-insider shareholders. I believe that non-insider shareholders are mostly those who own the approximately 3 million shares issued in the IPO. So for example if $9 million of the $15 million IPO cash remains, these 3 million shares could be worth $3 each.
    Does anyone else think this might be a reasonable possibility?
    ReplyDelete

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    1. Sound ok but unlikely.
      Delete
    2. The ipo was a scam by the ceo yu hong. The court will likely approve rescission of the ipo shares.
      Delete

  28. This is a planned scam that must be pursued to the fullest extent of the security law. The option above is simply a wishful thinking based on the history and actions of the insiders. The best option for all victims is to have a plan B alongside the Class Action.
    ReplyDelete
  29. To: EOIM Just a question. Are you an attorney? Do you own substantial shares?
    ReplyDelete
  30. John, I am a victim of this malicious crime seeking true and fair justice.
    ReplyDelete
  31. Then we have much in common. No axe to grind other than true and fair justice.
    ReplyDelete
  32. The TBET crime has brought near total ruination to some, including my family. How much would it cost for a bounty hunter to round up these cold heartless beasts in China?
    ReplyDelete
  33. Who gets the IPO money if still there
    ReplyDelete

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    1. The IPO would be rescinded and annulled with the money returned to vixtins based on Section 11 and 12 of the SEC 1933 ACT.
      Delete

  34. Can we petition chinese government to execute them
    ReplyDelete

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    1. As many victims of the scam are Chinese citizens, this is a possible option for the affected Chinese victims.
      Delete

  35. Not Only i lost my life savings on this Chinese frauds, but the US GOV is looking for 15 000 USD unpaid tax . The pretend that i have 50000 usd profit in 2010 and did not pay taxes on those money. in 2010 i transfered the money from Scottrade to Intercative borkers in UK and later lost them on TBET in 2010. In the meattime back then in 2010 i returned my green card and move back to Europe. This is simple unbeliavable. Last week i learn that i have to pay taxes on my lost money !!! The world is corrupted, dishonest....well...i am speechless...
    ReplyDelete

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    1. Mine is worse. I invested $177k bought some stocks on margin with it as security. When it collapsed, I got margin call from interactive broker and could not meet the call so I am currently owning more than $170,000 to the broker on margin.
      Delete

  36. This comment has been removed by the author.
    ReplyDelete
  37. Why is the SEC so quiet during all of this?
    ReplyDelete

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    1. SEC is helpless. They allowed all these Chinese frauds into the USA marketplace even with their knowledge of the difficulty in accessing auditing documents in China. They are still allowing more Chinese companies access to USA IPO market. Just incredible.
      Delete
    2. Hi there, any updates on the case? Any information will be greatly appreciated. Thanks.
      Delete
    3. No update. I called the Court to find out why the delays and the Court Clerk indicated they are very busy with many other Cases on backlog. This Court is very slow with only 2 senior judges and 2 magistrate judge. We just have to have patience. Once the dismissal motion is thrown away, defendants would have 20 days to respond fully to the complaint after which Discovery would start.
      Delete

  38. I've certainly learned my lesson. I'll never invest in another Chinese company as long as I live.
    As a matter of fact, I rarely partake in eggrolls anymore.
    ReplyDelete
  39. Winding the company up - BVI Shareholder Rights

    BVI corporation law has provided guidance as to when minority shareholders can apply to the court to dissolve a corporation:
    • The company is unable to function due to deadlock in the management;
    • The shareholders have lost confidence in the directors’ ability to manage the company’s affairs due to a lack of probity or fair conduct on the directors’ behalf22;
    • The company cannot function in accordance with the purpose for which it was created (it has lost its substratum’)23;
    • The directors have breached their fiduciary duties;
    • There has been misappropriation of the company’s assets. Mere suspicion of misappropriation is not enough, there must be cogent evidence to prove it has occurred;

    It may be a good idea that TBET shareholders ask court to appoint a receiver to get the IPO money in Hongkong and return the money to all the shareholders. For more information please search google with the following sentence:

    British Virgin Islands: Guiding You Through... Shareholder Rights In The British Virgin Islands pdf
    ReplyDelete
  40. http://www.shermanlawyers.net/opt_out_of_class_actions
    ReplyDelete
  41. Hello,
    any updates on this issue? Any news will be greatly appreciated. Thanks for all your efforts and hard work. Hope we get these crooks.
    ReplyDelete

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    1. Still waiting on the court to rule on motion to dismiss.
      Delete
    2. Violent robbers that rob with pen instead of gun.
      Delete

  42. Not just crooks. They are financial terrorists and violent criminals operating under the cover of the USA Security Law that has no deterrence.
    ReplyDelete
  43. Thanks for keeping us update on the issue. I just hope that this gets resolved fast, so we all get justice.
    ReplyDelete
  44. I complained to SEC as you suggested.
    ReplyDelete
  45. Just submitted my complaint to the SEC.
    ReplyDelete
  46. This News will be greatly appreciated pharmaceutical manufacturers. Thanks for sharing this post.
    ReplyDelete
  47. Hi EIOM. Thank you for your constant updated to this blog. I'm so glad to read about the BIG news on May 1, 2014 (case transfering to to the District of New Jersey). Now this is where the fun & excitement really begin. Let's see how strong of a case the Rosen lawyers can bring to the court - there definitely shouldn't be a lack of evidence from the plaintiff's side. Hoping for the best!
    ReplyDelete
  48. IM@bzep345... The final verdict of this theft could never ever be "fun & excitement". Yes it indeed will help those victimized by such callous criminals. However even upon full recovery (may g-d bless) this nightmare has destroyed peoples lives and will have a lingering lifetime effect.
    ReplyDelete
  49. Hi "Anonymous" - you spelled by name wrong, but regardless, let me explain myself. By the words "fun & excitement," what I really meant was this is when things get interesting... before this stage everything else was lawyers fighting to see which firm would take the lead on this case (all trying to a "piece of the pie"), building evidence for both sides of the parties, trying to find lead plaintiffs, trying to get in touch with TIBET directors/IPO auditors, court delaying by the defendants, etc. etc.

    As a victim in this fraud case, obviously I know first hand it's not "fun & excitement" for the victims, but it's also the most interesting part for us because this is when CEO Mr. Yu Hong and his army of minions will get caught red handed for submitting a bogus buyout offer.

    Hope this helps!
    ReplyDelete
  50. Im2,
    Only when justice prevails and the stolen money gets fully reimbursed. No one should be ripped off, especially the way this theft went down by these criminals.
    ReplyDelete
  51. I have over 100,000 shares. I am still holding on to these, as no value if I sell it now. Just wondering what happens if the company is not trading anymore? I mean not even as penny stock, and this case still going on. If anyone knows please let me know. By the way wonderful job keeping us all inform regarding the case. I hope this settles down within this year. Thanks and appreciate your efforts very much!
    ReplyDelete
  52. July 7, 2014 Hoping for good news.
    Why is the SEC so quiet during all of this?
    Why it is possible to trade this stock today annymore?
    ReplyDelete
  53. Hi EIOM - thanks for recent updates on the motion to dismiss filed by the defends and for your comments/opinions.

    Any idea how long ROSEN will take to file the Plaintiffs’ Memorandum in Opposition to Motion to Dismiss?

    With all that's going on right now in the NJ courts, I'm seeing a repeat of what happened between June-August 2013 in the Virgin Island courts. I'm sure all of this is just a tactic the defense is using to delay having to respond to the charges posed against them.

    It's frustrating to experience how slow the court systems work, but if this leads to justice prevailing, I'm all for being patient. Hoping for the best!
    ReplyDelete

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    1. We are dealing with cruel predators who understands the loopholes and uses the inefficienciesof the USA SEC and delays in USA legal to prey on innocent people. Thr Class Action will not give you justice unless it goes on Jury trial. Private lawsuit is better!
      Delete

  54. Any idea how long ROSEN will take to file the Plaintiffs’ Memorandum in Opposition to Motion to Dismiss?

    A schedule is in place, several weeks.
    ReplyDelete

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    1. Rosen is expected to file its responses on or before August 4 assuming it would not seek extension.
      Delete

  55. I think its not a good idea to sell at this price.
    Pharmaceutical Manufacturers
    ReplyDelete
  56. These crooks stole nearly everything I had. I had put in over $30,000. Now it's been years and soon I will be living in the street. This is absolutely no joke. At the same time they robbed me they simultaneously eliminated any chances I had to invest in the US bull market as it has made nearly everyone serious returns. I feel so low and unjustly defeated it is beyond expression.
    ReplyDelete

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    1. Very painful indeed. I can see why people sometimes seek revenge. Have patience for the legal system to playout.
      Delete

  57. This true horror story includes gross negligence, errors and omissions and reckless abandon, amongst others from the initial pre and post IPO underwriters, the overseers who were to monitor, the accountants, and of course the Chinese themselves, all were participants in this short lived fiasco which resulted in the total devastation and destruction to individuals and families alike (mine included as alluded to in previous posts). There is absolutely no valid excuse, rhyme or reason, and a complete restitution should result to all those who were victimized by these monsters.
    ReplyDelete

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    1. a horrible carnage
      Delete

  58. EIOM,

    Do you think Rosen will be able to get any money out of the two auditors for this case? How deep are their pockets (auditors)?

    Gary R
    ReplyDelete
  59. What the hell is taking so long? Is Rosen up to the task? They do not seem to be making any progress. What about a new lead counsel?
    ReplyDelete

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    1. Time was wasted in the Virgin Island. Now that we are in New Jersey, it is moving faster. We cannot petition the Court against ROSEN for another Lead Counsel because the delay is not coming from ROSEN, but from the Court. ROSEN has been an effective Plaintiff counsel so far. My primary concern though is whether ROSEN would push it to JURY which is what most of the victims want and not just settle for pennies. The CASE is backed by solid evidence and all key defendants are USA based entities. Till then, ROSEN remains our Lead Counsel.
      Delete
    2. Thank you! I believe if Rosen does not take it to jury we can op out and then go to trial. There are several with deep pockets and our evidence is "beyond" solid Correct!!!
      Delete

  60. I had a quick question. Having purchased shares of TIBET and gone through this fiasco as I still hold those shares, do I need to do anything to join the suit?
    ReplyDelete
  61. Very sad reading this website. i am chinese. It may be possible the ipo money was not stolen.
    ReplyDelete
  62. am chinese. everyone in beijing says americans are very stupid and very easy to scam. each time american company is duped, we laugh. no SEC saves any american.
    ReplyDelete

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    1. Just remember, paybacks are dear!!!!!!
      Delete

  63. you americans are stupiddly greedy. chinese will continue scamming all of you while you cry cry like baby.
    ReplyDelete

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    1. EatShit&Die you low-life scum bucket.
      Delete
    2. fork all of you american fools iinvestting on china to make money from china companys, china owns your debt and owns all of you, you are the scumbag and not me fool. china collect your money and you cry like baby and eat shit.
      Delete
    3. I wonder if you eat with that mouth?
      Delete

  64. This Chinese, or whomever "it" is who commented above has not an ounce of compassion, sympathy or anything one would consider decent and respectful in them. His/her words speak volumes as to how many horrible people there are out there in this world without a sense of morals and remorse. As for whoI am.... I'm now an economically challenged person who had lost most all of the monies I worked decades for in this Tibet Scam. My own personal life has suffered terribly and those who know me have also suffered collaterally. This is not a Victimless Crime. It has significantly destroyed my life.
    ReplyDelete

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    1. I wanna look at these criminals on the face.
      Delete

  65. Any updates guys?
    thanks.
    ReplyDelete
  66. I live in shangrila near the factory. Yu hong now live in russiaand ukraine and said ipo money waa never controlled by him. He said ask Zou anf mccarty where it is.
    ReplyDelete
  67. My aunt died last week and this scam killed her. She lost everything.
    ReplyDelete
  68. Some people commenting have been severely hurt and honest in expression as to what this has done to their lives. Others here have come to show their mean, cold hearted, evil nature. Why they're here is beyond my scope of my comprehension of humanity other than the devil has re-emerged with their presence. The ones who kick and beat those who are suffering, shame on you! Comments as to the one directly above is more indicitive to the damage this fraud has done to my family and my self.
    ReplyDelete
  69. Is Rosen making any progress????s
    ReplyDelete
  70. Still no progress with Rosen? Anyone care to reply?
    ReplyDelete

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    1. Waiting on the New Jersey Judge to rule
      Delete
    2. When an attorney files a motion, it is ruled on according to the Court's timeline (i.e., whenever the judge feels like it/has time to write an opinion). Once filed, there is really nothing an attorney can do to speed up the process. It isn't Rosen's fault that the Court has not made a ruling yet.
      Delete

  71. To rule on what and when please
    ReplyDelete

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    1. John Boy - Regarding your "what" question: Not to be rude, but have you actually read this blog? It contains a nice summary of the lawsuit so far, as well as a summary of the motion that the Court has before it.

      As for the "when": there is no timeline. Unfortunately for plaintiffs, the Court will make a ruling when it is ready, although given the long delay here, one would hope the Court rules soon.
      Delete

  72. So then anonymous why not humor me and tell me what the court is waiting to rule on?
    ReplyDelete

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    1. We (as in plaintiffs) are currently waiting on the judge to rule on defendent(s) motion(s) to dismiss the case.
      Delete

  73. Thank you so much EOIM.
    Any idea when the estimated date for the trial will be?
    ReplyDelete
  74. Hi EOIM! Thank you so much for the continuous updates and for describing what the "next step" is (what we are waiting on next).

    Any idea how long it will take for the timeline to be set by the court for the discovery and trial (if the defendants choose to take this to trial)? Hopefully it's not as long as it took for the court to rule on the defendants motion to dismiss.


    ReplyDelete
  75. Thank you for the regular updates and lets hope for the best: Full Rescission of the IPO, with interest compounded from the IPO date in Jan 2011 till present, and Full reimbursement of all legal fees and expenses.
    ReplyDelete
  76. sorry people. for tha ipo money, ask hayden and mccarty. they know where the money is hidden.- china man tibet insider
    ReplyDelete
  77. From gladpick,
    we are in the process of appointing Robert Seiden's firm to collect on a court judgment in China on behalf of QXM shareholders. If any one here lost money on QXM please contact me --gladpick@yahoo.com. If we are successful we could also use the experience to help us collect from the TBET criminals.
    ReplyDelete
  78. Thank you so much for the updates. It is relief reading it.
    ReplyDelete
  79. america fools crying. for yaa money ask zou and mccartty.
    ReplyDelete
  80. i have over 110,000 shares of this company, and i think that they are not even trading anymore as of march 18th, 2015 even on the otc. just wondering what happens next. if we are able to get some money out of these crooks, how to proceed, as i am thinking that my broker will soon take those shares out of my account. Any ideas? appreciate the help.
    ReplyDelete
  81. yu hong say ask hayden and downs for ipo stupid foolsh amerecans.
    ReplyDelete
  82. So sad for your aunt. Sorry. Evil is real.
    ReplyDelete
  83. When will we find the status of the IP money? Is Zou the only defendant that knows the status of the IPO money? Could Zou flea the country and hide in China?
    ReplyDelete
  84. ipo not stolen crazy stupid americans.zou and downs find it. yu hong didd not steal it. china tibet man
    ReplyDelete
  85. It's sad that as of 2 days ago, we passed the 3 year mark since Rosen first started their investigation on TBET.

    EIOM - do you happen to know what are we waiting on now? What can we do now that Hayden Zou didn't provide a response? When the discovery schedule commence/the process of trying to locate the IPO funds begin?

    Confused as to what is going on in the courts right how. Any clarification would be helpful.

    Thank you kindly,

    ~ Im2bz2p345 :)
    ReplyDelete
  86. Hi EOIM,

    Any update about the telephone conference scheduled on April 9 to discuss the status of the Case?

    Thank you so much
    ReplyDelete
  87. Any news on the case status conference telephone call??
    ReplyDelete

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    1. Next step is class certification motion in July.
      Delete

  88. I just cannot understand why this case is taking so very long to get resolved? Crystal clear we were wiped out by thievery. The money went somewhere, there were multiple wrongs being done and all or at least some of them need to pay for this. I know because I've been in a world of pain and suffering ever since without any let up whatsoever. Lost 2/3 of everything I owned in this. I am deeply depressed and ashamed to have invested in such a terrible fraud. Does anyone here know anything else significant or material to this case?
    ReplyDelete
  89. We are focusing on uncovering the IPO money trail. There is no evidence so far in the Case that the IPO Money left the USA financial system and reached the Chinese criminals. Subpoenas are currently being served to the IPO Bank, Auditors and Underwriter to know where the money is. In the absence of a clear evidence showing the IPO reaching Yu Hong, there is hope. The Lead Plaintiffs are working hard to ensuring that Justice is obtained from these evil and cruel people.
    ReplyDelete

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    1. If the IPO money is safe, why are Downs and Zou not coming forward with this information. You would think they would want to make themselves look like the good guys by claiming they prevented the Chinese criminals from getting the IPO money.
      Delete
    2. Both Downs and Zou know where the IPO money is. They are both evil and cruel having refused to disclose where the money is. Maybe their lawyers are advising them to deny. In this age of digital money transfer, the location of the IPO would be found.
      Delete

  90. Thank you for the update CFH, the evil and cruel destruction sure has taken it's toll on me... I pray for everyone hurt by this to be made whole and healed.
    ReplyDelete
  91. Thanks for that update China Fraud Hunter! :)
    ReplyDelete
  92. stupidd amerecans crying for ipo never came to china
    ReplyDelete
  93. sttupidd courrt. stupid SEC. no help
    ReplyDelete
  94. . mess tibet up in amereca.
    ReplyDelete
  95. I'm loving how quickly the Bankruptcy Court is moving the case along. It's almost shocking to hear because of how slow the court proceedings took place in NJ and was even more frustrating when it was in the U.S. Virgin Islands!

    Thanks for your continuous updates EIOM! :) These are very exciting times for all of us victims so I hope you can keep us up to date on what is going on.
    ReplyDelete
  96. Sorry if this gets posted twice as I am not seeing my original post here. I signed up with Rosen for the class action lawsuit. Im wondering if there is anything I should be doing. I have reached out to the firm and have gotten no responses. Any help would be greatly appreciated. you can contact me privately if need be at joshjacobson@me.com. Thanks everyone
    ReplyDelete

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    1. All updates you need to know at this time are in this blog. In coming days, something material might happen at the Bankruptcy Court and you should be checking back for updates.
      Delete

  97. I am still holding down my over 100,000 shares. Just wondering, once this case settle and we get the money, what would be the price for a single share? What would Rosen law firm take? I know it might be difficult to answer, but perhaps a rough guess would be sufficient at this point. I lost huge money in this. Greatly appreciate your answer.
    ReplyDelete
  98. This is confusing. Is Rosen trying to collect the IPO money through bankruptcy court from Sterne Agee? Did Anderson and Strucwick steal the Tibet IPO money before Sterne Agee acquired them? How will the bankruptcy case affect the Tibet class action security fraud case? Any ideas how this will play out?
    ReplyDelete
  99. IPO money is not in America fool. It is in HSBC HongKong account controlled by Zou.
    ReplyDelete
  100. I live in Australia. This blog helps me follow this case. Thank you so much for your effort. I hope they return back the money and freeze the Hong kong account soon.
    ReplyDelete
  101. Ty for the all the recent updates EIOM! Please continue to update us as the case progresses. Also, do you think that you could add the trial date of December 10 - 18, 2015 to your "Summary of Key Events & Timelines" section?
    ReplyDelete
  102. This blog is simply amazing.
    ReplyDelete
  103. I live in Bulgaria. Thank you so much for your enourmous efforts to update us regarding this case. I strongly believe that the truth will preveil in this case.
    Those people must be put in jail.
    ReplyDelete
  104. How will bankruptcy settlement agreement for $14 million if approved that would release Anderson & Strudwick and Sterne Agee affect us Tibet shareholders? Will we get any money out of the settlement?
    ReplyDelete
  105. All this may happen only in USA ! The whole country is one big fraud. The stock market in USA is the biggets fraud on the whole planet.
    No one provide responce so far where dissapeared 14 million usd investors money. The law system in USA is pure crap !!!! You can not trust anyone in this country.
    ReplyDelete
  106. The $2.25M "settlement" is utterly shameful. How can the Bankruptcy Trustee even consider this amount to be sufficient? Do they not release the severe impact this has had on the lives of investors who had faith in the U.S. market & regulations?

    So what ever happened to the defendants (particularly Hayden Zoy & Mac Downs) not disclosing the current location or status of the $14.4 million net IPO proceeds transferred to HSBC Account in Hong Kong. Why hasn't the court pressured them into revealing this information?
    ReplyDelete
  107. It's just unconscionable that Investors could get the shaft. These scum who stole the money... my only wish for them is eternal shame/ damnation (along with those who aided and abetted). Personally I know my loss of $35,000 has set me back many, many years... possibly forever as I'm near 60 very underemployed. Any settlement which doesn't bring true justice to those truly injured is outright injustice. I thought we could do better than those injured by the Madoff scam... little did I know most of them were to be made whole again.... so if this were to stand the way seems to be headed, I/we could get the full force of the shaft. This whole thing is Way Beyond Disturbing.
    ReplyDelete
  108. I just received by email, a "Notice of Pendency and Settlement of Class Action" from Strategic Claims Services which will release Anderson and Strudwick from
    further litigation.
    ReplyDelete
  109. Got a notice to file settlement form for up to $14 mil plus interest, Anderson & Strudwick: http://www.brightscope.com/financial-planning/firm/7755/Anderson-Strudwick-Incorporated/
    ReplyDelete
  110. I just received by email a "Notice of Pendancy and Settlement of Class Action" from Strategic Claims Services which releases Anderson and Strudwick from any
    further litigation.
    ReplyDelete
  111. Got a notice to file settlement of up to $14 mil plus interest for Anderson & Strudwick. Ave recovery of 94 cents per adr.
    ReplyDelete
  112. Watchout for misinformation. The settlement amount after expenses and legal fees is less than $2 m. The Trustee settled only $2.15m with Sterne so victims were further victimized. The $14 m settlement with Trustee is just to calculate the percentage of the less than $2m attributable to the Tibet class.
    ReplyDelete
  113. Hello EIOM,

    I received a recent e-mail with the subject line: "Anderson & Strudwick Litigation - Tibet Pharmaceuticals, Inc." I am wondering what others are doing. Is this for the settlement of $2.25 million and was that the final order by the judge was?
    Here is the body of the e-mail:
    "Your email address was provided to us by Class Counsel.

    Attached is the Notice and Claim Form for the above referenced litigation. In order to be eligible to participate in the settlement, you must fill out the claim form and mail it with supporting documentation postmarked no later than January 11, 2016 to: Anderson & Strudwick Litigation, c/o Strategic Claims Services, 600 N. Jackson Street, Suite 3, Media, PA 19063.

    If you have any questions, please contact us.

    Regards,

    Claims Administrator
    Strategic Claims Services
    600 N. Jackson St.
    Media PA 19063
    Phone: 610-565-9202
    Fax: 610-565-7985
    Toll Free: 1-866-274-4004"

    Attached was a claim notice PDF.
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    1. The worthless settlement is not $2.25 million for the Class. The Trustee will collect his fees, Trustee's counsel will collect his own fees plus 25%. Then the leftover would be distributed to the creditors based on their approved claims, then the one paid to the Tibet Class would be charged further atleast 25% by Rosen including expenses; then Strategic Claim will collect their fees for claim administration. At the end, the victims were nailed by the Trustee because he refused to take the Case to Trial, but rather preferred to collect his fees and move on.
      Delete

  114. What's the final 5 cents a share perhaps and lawyers get 25%?
    ReplyDelete
  115. Ty EIOM for the followup on my comment. I see that a lot of other shareholders also commented with the same thing.

    Can you advice as to what we (as the plaintiff's in the case/class) should be doing? Do we sign the claim notice & send it in? Do we have any alternate option at this point? You mention in your recent update that "Our focus now is on the three other Defendants in the New Jersey Court." From what I'm reading, if we sign & turn in the claim notice to accept the settlement amount, we give up to pursue this any further.

    Is the best thing to do for us to continue fighting this listed in question#14 on the claim notice FAQ? It states:
    "14. How do I tell the Court that I do not like the Settlement?

    You can tell the Court you do not agree with the Settlement, any part of the Settlement, or Class Counsel’s motion for attorneys’ fees, and that you think the Court should not approve the Settlement, by mailing a letter stating that you object to the Settlement in the matter of Dartell v. Bruce E. Robinson, Trustee and Anderson & Strudwick, Inc., Bankruptcy Case No. 14-32679, Adv. Pro. No. 15-03384. Be sure to include your name, address, telephone number, your signature, a list of your purchases and sales of Tibet Stock in order to show your membership in the Class, and all of the reasons you object to the Settlement. It must also state all your grounds for the objection, including any legal support known to you or your counsel, the name, address, and telephone number of all counsel who represent you, including former or current counsel who may be entitled to compensation in connection with the objection, a statement confirming whether your counsel plans to appear at the Settlement Hearing along with their name, address, and telephone number, and the number of times you filed an objection in the previous five years and the nature of each objection to each case in which you filed an objection in the previous five years. Be sure to mail the objections to the three different places listed below, postmarked no later than JANUARY 15, 2016 so the Court will consider your views:"

    If we simply accept this settlement, it sounds like this is only going to be pennies going back to the shareholders. This is my first time being involved in such a lawsuit, so please forgive me if my questions are rather basic. Hope you can help myself and others.
    ReplyDelete
  116. The victims cannot opt out of the Trustee's worthless settlement with Sterne because it is the Trustee Vs Sterne. However, the New Jersey Court is different and victims can easily opt out if they so desired.
    ReplyDelete
  117. do i need to do anything to get this notification? as i bought this company shares with in the time frame news is telling us. can anyone please guide me. thank you
    ReplyDelete

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    1. I did not get notification either. You can get the information at Strategic Claims Services website: http://www.strategicclaims.net/

      click on: Anderson & Strudwick Litigation on top right corner
      Delete

  118. How sad it is to lose eleven years of hard work and all my savings to such a crime.
    ReplyDelete
  119. Today I received a "NOTICE OF PENDENCY AND SETTLEMENT OF CLASS ACTION" about Tibet. It indicates that it provides $14,000,000 for the 14,845,834 shares outstanding. It estimates average recovery of $.74 per share subject to some assumptions.

    The information contained in the settlement document indicates that the "debtor estate has $89,1010.49 in it." It also indicates Sterne Agee & Leach, Inc. will "pay $2.25M." However, the document is silent as to who is paying the remaining monies up to the $14 M. Does anyone have any idea about this missing information?
    ReplyDelete

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    1. Read the recent blog for answer to your question.
      Delete

  120. EIOM - what is the next big event for the NJ court case? You mentioned: "Our focus now is on the three other Defendants in the New Jersey Court."

    Since our (plaintiff) trustee was garbage, will it now be Rosen vs the 3 defendants?
    ReplyDelete
  121. I'm really enjoying the design and layout of your website.
    It's a very easy on the eyes which makes it much more pleasant for me to come here and visit more often. Did you
    hire out a designer to create your theme? Exceptional work!



    Also visit my page class action lawsuit
    ReplyDelete
  122. I am aother TIBET stockholder. I was never sent any claim forms for the bankruptcy or class action. Can anyone give me the case number of both cases, bankruptcy and the class action, and the captions, so that I can file claims. Many thanks.

    Robert G Clawson Jr, 126 Queen St, Charleston, SC 29401, garrason@aol.com
    ReplyDelete

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    1. Download the forms here:
      http://www.strategicclaims.net/node/202
      Delete





18 comments:

  1. EIOM, what happened to entire history on the court cases and all of your previous blog posts? This blog was the best way to track the progress and show others the entire "trail" of this mess. Can that please be restored or linked to somehow? All of our previous comments are also missing.

    ReplyDelete
    Replies
    1. It went blank. Looking into it.

      Delete
    2. Well that stinks! Here is the most up-to-date archive you may find & recover the information from (up until your February 9th, 2016 post): https://web.archive.org/web/20160214173025/http://tibetpharma.blogspot.com/

      Hope this helps,

      ~ Im2bz2p345 :)

      Delete
  2. Incredible act of cruelty. Sorry folks. Evil exists.

    ReplyDelete
  3. Thanks you for your efforts in updating this site.

    ReplyDelete
  4. Rosen applied to the Court to expedite the approval of the $2,075,000 settlement with ACSB.Any idee when we see the money?
    Sterne Agee's settlement with the Trustee is still pending finalization!!Hoping for the best...

    ReplyDelete
  5. I have yet to receive anything with regards to the partial settlement, not even an acknowledgement? What is the delay? What else is in the works to achieve further restitution? It's now been five miserable years. Anyone here with knowledge kindly update us if you can. Thanks

    ReplyDelete
  6. When you are seeking justice from a corrupt rigged system that promotes fraud and protect criminals, such delays are expected. The useless SEC has done nothing for 5 years.

    ReplyDelete
  7. I contacted the the claims administrator at Strategic Claims last month on the status of the settlement. I was told they were still performing a quality assurance check. When I asked how long it would take, they could not provide me with an answer.

    ReplyDelete
  8. So is this the end of this nightmare? Is the measly $2 million, when and if it gets released, less all the high fees and expenses the final end result? My wife has never forgiven me as I lost a huge disproportional amount of our lifetime savings to these thieves. I'm 60,it's probably too late for me, but if I could find the one(s) responsible I would definitely torture them near mercilessly, as this loss I've suffered has tortured me all these many years. Anyone here feel similarly? Anyone here have any thoughts on what to do now?

    ReplyDelete
  9. Any updates or good news as of late that has come out of this horrible case? The holidays are around the corner and I cannot believe that more than 5 years later, we are still fighting for our pennies per share!

    ReplyDelete
  10. The Court will hold a hearing in this case (Dartell v. Tibet Pharmaceuticals, Inc. et al., Case No. 14-cv-3620) on June 6, 2017 to consider whether the approve the settlement and a request by the lawyers representing all Class Members

    ReplyDelete
  11. ^ Ty for that update melgibson!

    ReplyDelete
  12. Since there hasn't been much on update on this blog, I thought that I would update everyone about a recent event: Tibet Pharmaceuticals Exec Escapes Class Action Over IPO (https://www.law360.com/articles/908900/tibet-pharmaceuticals-exec-escapes-class-action-over-ipo).

    Law360, New York (April 3, 2017, 1:19 PM EDT) -- A New Jersey federal judge has allowed a director of a Tibetan pharmaceutical company to escape an investor class action alleging the company lied about its financial health ahead of a 2011 initial public offering, saying investors waited too long to serve him a copy of the suit.

    Investors in 2013 added Tibet Pharmaceuticals Inc. director Youhang Peng to their suit alleging that the company misrepresented its finances by overstating its assets and concealing adverse court decisions ahead of a $16.4 million IPO, but did not serve him until nearly three years later. U.S. Judge John M. Vazquez on Friday dismissed Peng from the suit, saying investors, who claim they were initially unsure whether Peng lived in China or Texas, hadn’t tried hard enough to serve him.

    “The court sees no basis upon which it should exercise its discretion to extend plaintiffs’ time to serve Peng,” Judge Vazquez said.

    Investors first filed the suit in 2012 in Virgin Islands federal court, alleging that Tibet Pharmaceuticals, a British Virgin Islands holding company that controlled a Chinese company that manufactured and sold modernized traditional Tibetan medicine, had misled investors in its IPO registration statement.

    Investors said Tibet, Peng and other directors concealed that the company had defaulted on $4.54 million in loans from the Agricultural Bank of China and that a Chinese court had permitted the bank to seize all of its assets.

    The bank began to auction off Tibet’s Chinese assets on Feb. 17, 2012, and the auction was announced in a Chinese Web post the same day, according to court records. Tibet responded to the announcement 10 days later with a news release calling the report untrue, according to the suit.

    The NASDAQ halted trading of Tibet’s shares on April 2, 2012, and delisted the stock on April 27 after Tibet failed to provide requested information.

    The case was transferred to New Jersey in May 2014 and the shareholders were granted certification in February 2016.

    The shareholders are represented by Laurence M. Rosen and Sara Fuks of The Rosen Law Firm PA.

    Peng is represented by Scott Cargill, Michael Tremonte and Justin J. Gunnell of Sher Tremonte LLP.

    Counsel information for Tibet Pharmaceuticals was not available on Monday.

    The case is Robin Joachim Dartell et al. v. Tibet Pharmaceuticals Inc. et al., case number 2:14-cv-03620, in the U.S. District Court for the District of New Jersey.

    --Additional reporting by Rick Archer. Editing by Kelly Duncan.

    ReplyDelete
  13. The "Judge" had made a technical decision basing it on a "lack of effort"? You gotta be kidding me, what Hogwash. Peng at best is complicit and he's a Criminal. What good are laws if they don't serve justice? He needs to pay the price for the torture he imposed on us. Real justice will never be served by the United States court system. We need to bring this POS to Real Justice. He needs to be captured and made an example of. It's said never to stoop down to such a low level. But with such scum buckets there's no other way to bring a POS like this to Justice. It really boils down to an eye for an eye.

    ReplyDelete
  14. I am curious about the response of Rosen law, is there any possibility of appeal against the decision?

    ReplyDelete
  15. Will there ever be justice served, or will these criminals be allowed to escape like Y.Peng? I sure hope not. We've lost a lot, including our future from this ordeal. The money and the worry and the loss of opportunities throughout the many years have taken a grave toll on us.

    ReplyDelete