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Kingold Jewelry, Inc. (NASDAQ: KGJI) Investor Securities Class Action Lawsuit 06/30/2020

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Lawsuit Overview

Case Dismissed
Company
Kingold Jewelry Inc
Security
NASDAQ: KGJI

Case Name
Kingold Jewelry Shareholder Class Action Lawsuit 06/30/2020
Type of Lawsuit
Shareholder Class Action
Court of Filing
U.S. District Court for the Eastern District of New York

Class Period Begin
Class Period End
Deadline To File for Lead
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Summary

March 4, 2021 - The case as voluntarily dismissed.

June 30, 2020 - An investor in shares of Kingold Jewelry, Inc. (NASDAQ: KGJI) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by Kingold Jewelry, Inc. in connection with certain allegedly false and misleading statements made between March 15, 2018 and June 28, 2020.

China based Kingold Jewelry, Inc. designs, manufactures, and sells 24-karat gold jewelry and Chinese ornaments in the People's Republic of China. Kingold Jewelry, Inc. reported that its annual Total Revenue rose from over $2 billion in 2017 to over $2.47 billion in 2018, and that its Net Income increased from $26.19 million in 2017 to $49.54 million in 2018. In March 2018, Kingold Jewelry, Inc filed its 2017 annual report on form 10-K in which the Company stated it allocated significant portion of its inventories as investment in gold and pledged as collateral to secure loans from banks and financial institutions. Kingold Jewelry, Inc also attested to its accuracy of financial reporting and disclosure of all fraud. Kingold Jewelry, Inc then reaffirmed these statements in its 2018 10-K.

On June 29, 2020, multiple news outlets reported that Kingold Jewelry, Inc may have used counterfeit gold as collateral to secure loans from more than a dozen Chinese financial institutions, reporting that at least some of 83 tons of gold bars used as collateral turned out to be nothing but gilded copper. Shares of Kingold Jewelry, Inc. (NASDAQ: KGJI) declined from $3.11 per share in October 2019 to as low as 0.43 per share on July 2, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of Kingold Jewelry, Inc. (NASDAQ: KGJI) common shares between March 15, 2018 and June 28, 2020, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between March 15, 2018 and June 28, 2020the defendants made false and/or misleading statements and/or failed to disclose that Kingold Jewelry, Inc. used fake gold as collateral to fraudulently secure loans, that consequently, the Company would face creditor lawsuits and be delisted from the Shanghai Gold Exchange, and that as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.