skypeople (nasdaq: spu) expert report on market efficiency

Case 1:11-cv-02700-PKC Document 118-1 Filed 06/28/13 of 111

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

ZACHARY LEWY, JOHN LEE, ERIC KLEMENT, AND BENJAMIN L. PADNOS, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,

Plaintiffs,

vs.

SKYPEOPLE FRUIT JUICE, INC., RODMAN & RENSHAW, LLC, BDO LIMITED, CHILD, VAN WAGONER & BRADSHAW, PLLC, YONGKE XUE, HONGKE XUE, XIAOQIN Y AN, SPRING LIU, NORMAN KO, GUOLIN WANG, ROBERT B. FIELDS, AND JOHN SMAGULA,

Defendants.

Civil Action No. 11-cv-2700 (PKC)

EXPERT REPORT ON MARKET EFFICIENCY

Gang Hu, Ph.D., CFA

June 28, 2013


TABLE OF CONTENTS

INTRODUCTION AND SCOPE ................................................................................................... 1CREDENTIALS ............................................................................................................................. 1CONCLUSIONS............................................................................................................................. 3FACTUAL BACKGROUND ......................................................................................................... 3

About the Company .................................................................................................................... 3EFFICIENT MARKET DEFINED ................................................................................................. 4

The Cammer Factors ............................................................................................................... 6EFFICIENCY OF THE MARKET FOR SKYPEOPLE COMMON STOCK ............................... 8

Trading Volume .......................................................................................................................... 8Analyst Coverage and Other Avenues of Information Dissemination ....................................... 9

Traditional Sell-Side Analyst Coverage ................................................................................. 9Institutional Ownership and Buy-Side Analysts ..................................................................... 9Other Avenues of Information Dissemination ...................................................................... 10

Market Makers .......................................................................................................................... 11S-3 Registration Eligibility ....................................................................................................... 12

EMPIRICAL EVIDENCE OF SKYPEOPLE MARKET EFFICIENCY .................................... 13F-Test and Ansari-Bradley Volatility Test Conducted on Earnings Announcements .............. 15

Earnings Announcement Dates ............................................................................................. 16F-Test ........................................................................................................................................ 17Ansari-Bradley Test .................................................................................................................. 18Event Study ............................................................................................................................... 19

Selection of Events ............................................................................................................... 21Isolating the Impact of Company-Specific Information ....................................................... 22Regression Results ................................................................................................................ 23t-test....................................................................................................................................... 24

Event Study Results .................................................................................................................. 24April 1, 2011 ......................................................................................................................... 24June 1, 2011 .......................................................................................................................... 26Event Study Summary .......................................................................................................... 27

Empirical Analysis Summary ................................................................................................... 27SUMMARY .................................................................................................................................. 27LIMITING FACTORS ................................................................................................................. 28APPENDIX-1: LOGARITHMIC RETURNS .............................................................................. 29


INTRODUCTION AND SCOPE

1. I was asked by The Rosen Law Firm P.A., counsel for the Plaintiffs, to determine whether

the common stock of SkyPeople Fruit Juice, Inc. (“SkyPeople” or the “Company”) traded

in an efficient market during the Class Period, March 31, 2010 to June 1, 2011.

2. I analyzed the market for SkyPeople common stock, the price behavior of the stock, and the

factors that are generally accepted to be indicative of market efficiency. I examined

Company press releases, conference call transcripts, equity analyst reports, news articles,

SEC filings, trading volume, the performance of the overall stock market, and the

performance of SkyPeople’s peer group, as well as other pertinent data and documents. I

also read Plaintiffs Consolidated Amended Class Action Complaint (“Complaint”) dated

November 28, 2011, and analyzed the allegations therein. Exhibit-1 lists the documents I

reviewed and relied upon in the course of this engagement.

3. This report presents my methodology, findings, and conclusions.

4. I understand that discovery is ongoing in this case. I reserve the right, in my sole discretion,

to make any corrections or additions to my report, and to modify my opinion, should any

new or additional evidence become available.

CREDENTIALS

5. I am a tenured Associate Professor of Finance at Babson College where I hold the Zwerling

Family Endowed Term Chair in Finance. Previously, I held the Fidelity Term Chair.

6. I hold a Ph.D. in Finance from Boston College, and a Bachelor’s degree in System

Engineering from Tianjin University, China. I also hold the Chartered Financial Analyst

(“CFA”) designation, granted by the CFA Institute.

7. I have published extensively in the field of finance. My papers have been published in

major finance academic journals, well-known practitioner outlets, and books, including

Journal of Financial Economics, Review of Financial Studies, Journal of Financial and

Quantitative Analysis, Journal of Corporate Finance, Journal of Financial Markets,

Journal of Financial Intermediation, Journal of Business Finance and Accounting, Journal

of Financial Research, Financial Analysts Journal, Journal of Trading, Law360, and a


book chapter published by the Brookings Institution. I have an article forthcoming in

Journal of Forensic Economics. My earlier research in the fields of operations research and

mathematics has been published in European Journal of Operational Research and Applied

Mathematics Letters.

8. My research has been presented at more than 40 national and international conferences,

including the American Finance Association, the National Bureau of Economic Research,

the Western Finance Association, and the American Accounting Association annual

meetings. My research has been cited in SEC Chairman’s response letter to an inquiry by

Congress, and featured in the Harvard Law School Forum on Corporate Governance and

Financial Regulation.

9. I am a founder of the Boston Area Finance Symposium, an annual finance conference

among Boston-area academic institutions including Babson College, Bentley University,

Brandeis University, Northeastern University, University of Massachusetts Amherst, and

University of Rhode Island. I currently serve on the symposium’s organizing committee. I

have been selected to review papers for numerous finance journals, and I have reviewed

finance textbook manuscripts.

10. At Babson College, I have taught numerous finance classes, organized the finance seminar

series, and advised several honors theses focusing on domestic and foreign financial

markets.

11. Prior to my joining the faculty at Babson College, I worked as a Quantitative Trade Analyst

at Fidelity Management & Research Company in Boston, MA. I worked on equity trading

techniques, broker relationships, and trading costs measurement in Fidelity’s Global Equity

Trading group.

12. I am a member of the American Finance Association, the Western Finance Association, the

Financial Management Association, the Eastern Finance Association, the Southern Finance

Association, the Boston Security Analysts Society, The Chinese Finance Association, and

the CFA Institute.

13. The CFA designation is the premier credential for financial analysts worldwide. In order to

receive this credential, applicants must pass a series of three exams covering such topics as

economics, equity analysis, financial valuation, business analysis, quantitative methods,

investment analysis, portfolio management, risk management, financial accounting, and


ethical and professional standards. To be granted the CFA charter, one also needs to

accumulate sufficient relevant work experience in the financial industry.

14. My curriculum vitae is attached as Exhibit-2. I do not have any prior testimony

appearances over the past four years.

15. I am an affiliated expert with Crowninshield Financial Research, a financial economics

consulting firm, which receives compensation for the work performed by me and the

analysts who assist me on this case. Crowninshield is being compensated at a rate of $450

per hour for my work on this matter. In accordance with recognized professional ethics, my

professional fees for this service are not contingent upon the opinions expressed herein. I

have no present or intended financial interest in the outcome of this matter.

CONCLUSIONS

16. SkyPeople common stock traded in an efficient market over the course of the Class Period.

17. Statistical tests prove that there was a cause-and-effect relationship between the release of

new material information and movements in the SkyPeople common stock price during the

Class Period. In addition, event study analysis proves that SkyPeople common stock

reacted in a statistically significant fashion on the allegedly corrective disclosure dates. The

results of the event study show that SkyPeople’s common stock exhibited a cause-and-

effect relationship with respect to the particular information at issue in this case. The

results of both tests establish that SkyPeople common stock satisfied the empirical Cammer

factor, widely-recognized as the most important factor.

18. SkyPeople common stock satisfied most of the remaining Cammer factors, which,

consistent with financial economic principles and empirical research, indicates market

efficiency.

FACTUAL BACKGROUND

About the Company

19. Throughout the Class Period, SkyPeople was a holding company incorporated in Florida,

with two direct wholly owned subsidiaries: Pacific Industry Holding Group Co., Ltd.,


(“Pacific”) and Harmony MN Inc., (“Harmony”).1 Pacific held a 99.78% equity interest in

SkyPeople (China), which was based in the People’s Republic of China (“PRC”).2

Through its indirect ownership of SkyPeople (China), the Company was primarily in the

business of producing and selling fruit juice concentrate (60% of the Company’s revenues

in 2010), fruit beverages (24% of the Company’s revenues in 2010), and other fruit-related

products (16% of the Company’s revenues in 2010) in and from the PRC.3

20. The Company reported revenues of $59.25 million and $93.25 million for the fiscal years

2009 and 2010, respectively.4 For the fiscal years 2009 and 2010 the Company reported

net income of $16.40 million and $22.97 million, respectively.5 According to SkyPeople’s

10-K filing, in 2009 and 2010 SkyPeople China accounted for 92.6% and 92.2% of the

Company net income.6

21. As of the close of trading on March 31, 2010, the first day of the Class Period, SkyPeople’s

market capitalization (the aggregate value of all outstanding shares), was $118.42 million.7

The market capitalization climbed to a Class Period high of $143.13 million on April 14,

2010. By June 2, 2011, the first day after the end of the Class Period, the Company’s

market capitalization had fallen to $43.57 million. This drop represents a decline of 69.5%

from the Class Period high.

22. The peak stock price during the Class Period was $7.24 per share on November 10, 2010.

By June 2, 2011, SkyPeople’s stock price had fallen to $2.16 per share. This drop

represents a decline of 70.2% from the Class Period high.

EFFICIENT MARKET DEFINED

23. The definition of market efficiency set forth by Judge Alfred J. Lechner, Jr. in the 1989

Cammer v. Bloom decision is often cited as a legal authority on the meaning of market

efficiency:

1 SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010, filed April 1, 2011, p. 2. 2 SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010, filed April 1, 2011, p. 2. 3 SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010, filed April 1, 2011, p. 2. 4 SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010, filed April 1, 2011, F-3. 5 SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010, filed April 1, 2011, F-3. 6 SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010, filed April 1, 2011, F-3. 7 Share price data obtained from the Center for Research in Security Prices (“CRSP”). Shares outstanding data obtained from SkyPeople SEC filings.


“As relevant here, courts have permitted a rebuttable presumption of reliance in the case of securities traded in ‘efficient markets’ (i.e., markets which are so active and followed that material information disclosed by a company is expected to be reflected in the stock price).” Cammer v. Bloom, 711 F. Supp. 1264, 1273 (D.N.J. 1989) (parentheses as in original).

24. Judge Lechner also cited the definitions offered by commentators Alan R. Bromberg and

Lewis D. Lowenfels, and by finance professor Eugene Fama:

“An efficient market is one which rapidly reflects new information in price.” Bromberg and Lowenfels, cited in the Cammer Opinion, 711 F. Supp. at p. 1276.

“A market in which prices always ‘fully reflect’ available information is called ‘efficient.’” Fama, “Efficient Capital Markets: A Review of Theory and Empirical Work,” Journal of Finance, 1970, cited in Cammer, 711 F. Supp. at 1280.

25. The Supreme Court in the Basic v. Levinson decision focused on the same important

characteristic at the heart of these definitions of market efficiency:

“The fraud on the market theory is based on the hypothesis that, in an open and developed securities market, the price of a company’s stock is determined by the available material information regarding the company and its business…” Basic Inc. v. Levinson, 485 U.S. 224, 240-41 (1988)(quoted in Cammer, 711 F. Supp. 1276).

26. The recent Amgen decision defined market efficiency similarly:

“The fraud-on-the market premise is that the price of a security traded in an efficient market will reflect all publicly available information about a company;” Amgen Inc., v. Connecticut Retirement Plans, 133 S. Ct. 1184, 1190 (2013).

27. The recent Halliburton decision cited Basic’s definition of market efficiency, and

emphasized that in an efficient market a security’s price also reflects misrepresentations

and public misstatements, as it reflects all publicly available information:

“According to that theory [the “fraud-on-the-market” theory], ‘the market price of shares traded on well-developed markets reflects all publicly available information, and, hence, any material misrepresentations.’ Under


that doctrine, the Court explained, one can assume an investor relies on public misstatements whenever he ‘buys or sells stock at the price set by the market.’” Erica P. John Fund, Inc. v. Halliburton Co., 133 S. Ct. 2179, 2181-2182 (internal citations omitted).

28. An efficient market, as defined by Cammer, Basic, Amgen, and Halliburton, is consistent

with the definition generally accepted in the academic finance community; according to

Bromberg and Lowenfels, and Fama, an “efficient market” is a market in which available

information is rapidly incorporated into the prices of securities such that the trading price

reflects all available information.

29. Market efficiency is relevant to a securities case as it addresses the question of whether or

not false information (whether in the form of an alleged misrepresentation or omission)

would likely have an impact on the prices at which investors bought and sold.

The Cammer Factors

30. Cammer lays out five factors that are used in determining whether the market for a security

is efficient. The five factors are: 1) trading volume, 2) coverage by securities analysts, 3)

number of market makers, 4) eligibility for S-3 registration, and 5) empirical evidence that

the security price reacts to material information. Economic rationales support each factor as

an indicator of market efficiency.

31. Empirical research has confirmed that volume, number of market makers, and analyst

coverage are indicative of market efficiency:

“Consistent with the efficiency indicators used recently by the courts, the inefficient firms have lower mean trading volume, fewer market makers, lower analyst following, and lower institutional ownership (number and percentage) than efficient firms.” “The Fraud-on-the-Market Theory and the Indicators of Common Stock Efficiency,” by Brad M. Barber, Paul A. Griffin, and Baruch Lev, Journal of Corporation Law, 1994, p. 302.

32. With respect to the empirical factor, Barber, et al. used empirical tests as the standard for

market efficiency by which to judge the significance of the other variables. Consequently,

they acknowledge the importance of the empirical factor.


33. Consistent with financial economic theory and empirical research, the language used by the

Cammer Court describes the factors not as five necessary factors, but rather as indicative of

the degree to which the security market is expected to be efficient:

“There are several different characteristics pertaining to the markets for individual stocks which are probative of the degree to which the purchase price of a stock should reflect material company disclosures.” Cammer, 711 F. Supp. at 1283.

34. The Cammer opinion describes the nature of the five factors as follows:

“First, plaintiffs could have alleged there existed an average weekly trading volume during the class period in excess of a certain number of shares.”Cammer Opinion, 711 F. Supp. at 1286.

“Second, it would be persuasive to allege a significant number of securities analysts followed and reported on a company’s stock during the class period.” Cammer Opinion, 711 F. Supp. at 1286.

“Third, it could be alleged the stock had numerous market makers.” Cammer Opinion, 711 F. Supp. at 1286.

“Fourth, as discussed it would be helpful to allege the Company was entitled to file an S-3 Registration in connection with public offerings…” Cammer Opinion, 711 F. Supp. at 1287.

“Finally, it would be helpful to a plaintiff seeking to allege an efficient market to allege empirical facts showing a cause and effect relationship between unexpected corporate events or financial releases and an immediate response in the stock price.” Cammer Opinion, 711 F. Supp. at 1287.

“As previously noted, one of the most convincing ways to demonstrate efficiency would be to illustrate over time, a cause and effect relationship between company disclosures and resulting movements in stock price.” Cammer Opinion, 711 F. Supp. at 1291.

35. In the sections that follow I analyze each of the five Cammer factors to determine whether

the market for SkyPeople common stock was efficient during the Class Period.


EFFICIENCY OF THE MARKET FOR SKYPEOPLE COMMON STOCK

36. To assess whether the market for SkyPeople common stock was an efficient market, I

analyzed the market and behavior of SkyPeople common stock, focusing on the five

factors, cited in Cammer, that are generally accepted to be indicative of market efficiency

for a publicly traded security.

Trading Volume

37. Throughout the Class Period, SkyPeople common stock traded regularly and actively. On

average, over 157,363 shares changed hands daily.8 On one day, August 25, 2010, over 2

million shares traded. SkyPeople common stock trading data is presented in Exhibit-3.

38. In addition to average daily trading volume, another volume metric to consider in

determining market efficiency is the percentage of outstanding shares that turn over each

week. During the Class Period, the average weekly trading volume was 3.96% of shares

outstanding.9 This level of trading activity is above levels accepted by courts as being

indicative of market efficiency for common stocks.10 In the case of the common stock of

Coated Sales, Inc., the Cammer Court cited the conclusion of Alan R. Bromberg and Lewis

D. Lowenfels that “weekly trading of 2% or more of the outstanding shares would justify a

strong presumption that the market for the security is an efficient one; 1% would justify a

substantial presumption.”11 Trading volume for SkyPeople common stock during the Class

Period was well above the threshold for a strong presumption of market efficiency.

39. Both in terms of average daily trading volume and also on the basis of the percentage of

outstanding shares traded weekly, the market for SkyPeople common stock was active.

Consistent with the Cammer opinion and economic theory, the active trading volume in

SkyPeople common stock is strong evidence of the efficiency of the market for that

security over the course of the Class Period.

8 Financial data provided by CRSP. 9 Estimated by dividing the average daily volume by the average number of shares outstanding, times 5 (the number of trading days in a typical week). 10 Cammer Opinion, 711 F. Supp. at p. 1286. 11 Ibid., at p. 1293.


Analyst Coverage and Other Avenues of Information Dissemination

Traditional Sell-Side Analyst Coverage

40. Securities analysts disseminate and interpret information about the companies they cover.

They conduct research and provide valuation opinions, helping market participants acquire

relevant information and understand the implications of that information for valuation and

investment decisions. Consequently, securities analysts facilitate the flow of information

and the digestion of information within the marketplace. These functions promote market

efficiency.

41. SkyPeople was the subject of analyst coverage during the Class Period. I obtained and

reviewed analyst reports on SkyPeople from the Thomson Research database published

during the Class Period by Roth Capital Partners. In total, I obtained 12 reports published

by Roth Capital Partners during the Class Period. Notably, Roth Capital Partners published

reports on SkyPeople throughout the Class Period, beginning April 1, 2010 through May

18, 2011.12

42. A review of news articles during the Class Period as well as investment message boards

indicated that at least one additional analyst, Absaroka Capital Management, covered

SkyPeople. I reviewed the Absaroka Capital Management report and determined that it

contained valuation-relevant analysis and recommendations.

43. Analysts were evaluating SkyPeople and making their research available to investors.

Consistent with the Cammer opinion and financial economic principles, the coverage of

SkyPeople by professional securities analysts is evidence of the efficiency of the market for

SkyPeople common stock during the Class Period.

Institutional Ownership and Buy-Side Analysts

44. Vickers Stock Research Corporation (“Vickers”) provides data on institutional ownership

of SkyPeople common stock. The data is compiled from the 13-F filings that major

investment institutions are required to submit to the SEC. Major institutions are defined as

firms or individuals that exercise investment discretion over the assets of others in excess

of $100 million. Large investment firms generally employ financial analysts who conduct

12 “SPU: 4Q Beat; Positive Outlook; Maintain Buy/PT,” by Howard Zhou and Rachel Du, Roth Capital Partners, analyst report, April 1, 2011; and “SPU: Concentrate Sales to Slow; Cautious on Beverage Outlook,” by Howard Zhou and Nick Ning, Roth Capital Partners, analyst report, May 18, 2011.


their own research on the stocks they buy. According to the Vickers data, at least 51 major

institutions owned SkyPeople common stock during the Class Period.13 During the Class

Period, institutional holdings averaged 16.50% and 40.76% of shares outstanding and

public float, respectively.

Other Avenues of Information Dissemination

45. In addition, SkyPeople was the subject of two published articles on the investment analysis

website Seeking Alpha during the Class Period.14 Though these reports are not published

by traditional sell-side analysts, they are publicly-available, widely-disseminated, and

contain value-relevant information including buy/sell recommendations.

46. The Cammer decision dates back to 1989, now 24 years ago. The world of information

availability, including pertaining to investment research and analysis, is very different than

it was in the late 80’s. Nowadays, the average investor is more likely to seek out financial

blogs and internet-only pieces than traditional analyst reports. Many financial blogs,

including Seeking Alpha, have become leading disseminators of financial information,

supplementing or replacing traditional sell-side equity analyst reports for some investors.

These new channels of information dissemination help promote market efficiency for many

securities.

47. Financial academics have long recognized the importance of information published on

financial websites to the stock market. As far back as the early 2000’s, researchers

understood the relationship between online postings and abnormal stock price returns.15

More recently, research has shown that published investment analysis on finance-oriented

websites such as Seeking Alpha conveys information to the market and impacts stock

prices:

13 At least 51 institutions held SkyPeople common stock according to filings that reported holdings quarterly from March 31, 2010 through March 31, 2011. Additional institutions may have held SkyPeople common stock during the Class Period, though not on the quarterly reporting dates. 14 “SkyPeople Fruit Juice: Sky High Stock Opportunity for Value Investors,” December 21, 2010, by Andy Li (http://seekingalpha.com/article/242974-skypeople-fruit-juice-sky-high-stock-opportunity-for-value-investors), and “SkyPeople: Strong Potential for Fruitful Returns,” April 14, 2011, by China Economic Review (http://seekingalpha.com/article/263641-skypeople-strong-potential-for-fruitful-returns). 15 “Internet Message Board Activity and Market Efficiency: A Case Study of the Internet Service Sector using RagingBull.com,” by Robert Tumarkin, Financial Markets, Institutions & Instruments, volume 11, issue 4, November 2002.


“Specifically, we detect a strong link between the views expressed on [Seeking Alpha] and contemporaneous and subsequent stock returns. This link is stronger for articles that receive more attention and for companies likely to be neglected by traditional advice sources. The views expressed on SA also predict earnings surprises, suggesting that this form of peer-based advice not only affects investor behavior, but also provides meaningful information with regard to company fundamentals.” “Customers As Advisors: The Role of Social Media in Financial Markets,” by Chen, et al., Working Paper, April 9, 2012, p. 2.

48. Thus, SkyPeople was known in the investment community, covered by both traditional

sell-side analysts and buy-side analysts, and followed in leading financial blogs such as

Seeking Alpha. These facts support a finding that the market for SkyPeople common stock

was an efficient market during the Class Period.

Market Makers

49. The number of market makers is one of the factors the Cammer Court determined indicates

market efficiency. The company that was the subject of the lawsuit in the Cammer case

was Coated Sales, Inc., which was listed on the NASDAQ stock exchange. The NASDAQ

is an electronic exchange that makes use of multiple competing market makers. Market

makers are financial intermediaries who trade in a particular security, standing ready to buy

and sell with investors and institutions. Consequently, for a NASDAQ-listed stock, a large

number of market makers indicates that there are many market participants trading that

particular stock. A large number of market makers also indicates that there is a high degree

of liquidity. With a large number of market makers it is generally easy for investors to

execute trades in a timely fashion with reasonable transaction costs.

50. For the majority of the Class Period, SkyPeople common stock was listed on the NASDAQ

exchange and is still listed on the NASDAQ.16 Cammer explicitly acknowledged the

importance of a NASDAQ listing and the implications of such a listing on market

efficiency, citing Bromberg and Lowenfels:

16 SkyPeople’s common stock began trading on the NASDAQ on April 20, 2010, immediately prior to that the Company’s common stock traded on the NYSE Amex (SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010, filed April 1, 2011, p. 29.).


“We think that, at a minimum, there should be a presumption – probably conditional for class determination – that certain markets are developed and efficient for virtually all the securities traded there: the New York and American Stock Exchanges, the Chicago Board Options Exchange and the NASDAQ National Market System.” Bromberg and Lowenfels, cited in Cammer, 711 F. Supp. at 1292.

51. During the Class Period, according to Bloomberg, there were at least 155 market makers

for SkyPeople common stock. Some of the market makers included: Barclays Capital;

Citigroup Global Markets; Goldman Sachs; JPMorgan; Merrill Lynch; Morgan Stanley;

and UBS. A complete list of market makers for SkyPeople common stock during the Class

Period is presented in Exhibit-4.

52. That SkyPeople common stock traded on the NASDAQ and that numerous financial

institutions also served as market makers are strong evidence that SkyPeople common

stock traded in an efficient market.

S-3 Registration Eligibility

53. The Cammer opinion noted that S-3 registration supports market efficiency because a

company is entitled to S-3 registration when, among other things, it has filed Exchange Act

reports for a specified length of time, has outstanding float above a certain value, and for

smaller companies, has trading volume above a certain level. At the time of the Cammer

opinion, the conditions for S-3 registration were that a company filed financial reports with

the SEC for 36 months, and had outstanding float over $150 million held by non-affiliates,

or $100 million of such float coupled with annual trading volume exceeding 3 million

shares. The Cammer court noted that the filing requirement ensured that financial data was

available to market participants, and the size and volume requirements indicated that many

market participants would have examined the information.

“Proposed Form S-3 recognizes the applicability of the efficient market theory to the registration statement framework with respect to those registrants which usually provide high quality corporate reports, including Exchange Act reports, and whose corporate information is broadly disseminated, because such companies are widely followed by


professional analysts and investors in the market place. Because of the foregoing observations made by the SEC, the existence of Form S-3 status is an important factor weighing in favor of a finding that a market is efficient.”Cammer Opinion, 711 F. Supp. at pp. 1284-1285.

“The ‘public float’ aspect of the Form S-3 requirements ensures that enough investors have in fact read the previously filed document.” Cammer Opinion, 711 F. Supp. at p. 1285.

“Again, it is the number of shares traded and value of shares outstanding that involve the facts which imply efficiency.” Cammer Opinion, 711 F. Supp. at p. 1287.

54. The SEC has now determined that companies need not have a float that is greater than $75

million if, among other conditions, it has a class of common equity listed on a national

securities exchange, is not a shell company, is current in its filings, and has made timely

filings for the previous 12 months.17

55. The SEC has made these changes because it recognizes that the internet has vastly

increased the amount of data available and disseminated to investors.18 Thus, the SEC has

found that it is no longer necessary that an issuer’s float be at least $75 million before there

is sufficient information about the issuer for its shares available to the public to create a

broad and efficient market.

EMPIRICAL EVIDENCE OF SKYPEOPLE MARKET EFFICIENCY

56. Of the five Cammer factors, the empirical factor was cited by the Cammer Court as “one of

the most convincing ways to demonstrate efficiency”:

“As previously noted, one of the most convincing ways to demonstrate efficiency would be to illustrate over time, a cause and effect relationship between company disclosures and resulting movements in stock price.” Cammer Opinion, 711 F. Supp. at p. 1291.

17 “Eligibility of Smaller Companies to Use Form S-3 or F-3 for Primary Securities Offerings,” by the U.S. Securities and Exchange Commission, January 28, 2008. 18 “Revisions to the Eligibility Requirements for Primary Securities Offerings on Forms S-3 and F-3,” available at http://www.sec.gov/rules/final/2007/33-8878.pdf, at pp. 7-9.


57. The special importance the Cammer Court placed on the empirical factor is justified by

economic principles, as the empirical factor focuses on the essence of market efficiency

whereas the other four factors are indicators that generally signal market efficiency.

58. I conducted two types of empirical tests of the efficiency of the market for SkyPeople

common stock to determine whether SkyPeople’s stock price reacted to earnings

announcements. The first type comprised the F-test, and the second type comprised the

Ansari-Bradley volatility test. Both tests examined whether or not SkyPeople common

stock exhibited market efficiency by responding to the increased flow of information that

transpired on earnings announcement dates.

59. It is a widely accepted principle of finance that earnings announcements contain material

information.19 Consequently, testing to determine whether or not SkyPeople common

stock reacted to earnings announcements by moving more on earnings announcement dates

than on other dates indicates whether the market for SkyPeople common stock was

efficient.

60. The F-test and Ansari-Bradley test measure whether SkyPeople stock price movements

were significantly greater on earnings announcement dates than on other dates, which

determines whether SkyPeople common stock efficiently reacted to the greater flow of

information that transpired on those dates.

61. I also conducted an event study to further assess efficiency of the market for SkyPeople

common stock. An event study investigates whether or not a security price reacts

appropriately to the release of new information. A significant and appropriate reaction to

new material information indicates market efficiency. Whereas the F-test and Ansari

Bradley volatility test determine whether SkyPeople stock responded efficiently to earnings

announcements collectively, the event study focused on the reaction of the stock to

individual events. By focusing the event study on alleged corrective disclosures, I can

ascertain whether the market for SkyPeople common stock was efficient with respect to the

particular information at issue in this case.

19 For example: Financial Reporting an Accounting Revolution, 3rd ed., William H. Beaver, 1998; and “Earnings Management to Exceed Thresholds,” by Francois Degeorge, Jayendu Patel, and Richard Zeckhauser, Journal of Business, 1999.


F-Test and Ansari-Bradley Volatility Test Conducted on Earnings Announcements

62. While reasonable people may disagree about whether certain earnings announcements are

appropriate for inclusion in a market efficiency event study, it is well established that

earnings announcements generally contain some of the most important and material

information that a company releases:

“No other figure in the financial statements receives more attention by the investment community than earnings per share. The relationship between accounting earnings and security prices is probably the single most important relationship in security analysis, and its prominence is reflected in the attention given to price-earnings ratios.” Financial Reporting an Accounting Revolution, 3rd ed., William H. Beaver, 1998, p. 38.

“Analysts, investors, senior executives, and boards of directors consider earnings the single most important item in the financial reports issued by publicly held firms.” “Earnings Management to Exceed Thresholds,” Francois Degeorge, Jayendu Patel, and Richard Zeckhauser, Journal of Business, 1999, p. 1.

63. This sentiment is echoed in recent research on the impact of earnings announcements:

“It is widely perceived that earnings announcements have a major impact on stock prices at the level of individual stocks.”“How Information Transmits to Equity Markets: Earnings Announcements and Volatility,” Jeffrey R. Gerlach and Jae H. Lee, Working Paper, Sungkyunkwan University, 2010, p. 11.

64. Numerous well-known and highly-regarded academic studies (for example, Beaver [1968],

Ball and Brown [1968], Ball [1978], Watts [1978], Patell and Wolfson [1984], and Ball and

Kothari [1991]) have specifically examined stock price movements caused by earnings

announcements.

65. In short, it is indisputable that earnings announcements are important to investors and

therefore to the determination of stock prices. Thus, such announcements typically contain

material information that could cause the stock price to change.

66. By examining whether the Company’s common stock price moved more on earnings

announcement days than on other days, one can determine whether the stock reacted to new

material information. This cause-and-effect relationship is the essence of market


efficiency. Consequently, greater stock price movement on earnings announcement days is

indicative of market efficiency.

Earnings Announcement Dates

67. During the Class Period, SkyPeople made six earnings announcements:

i. March 31, 2010, after the close of trading – SkyPeople reported financial results for Q4 2009 and fiscal 2009 (quarter and fiscal year ending December 31, 2009).20

ii. May 17, 2010, after the close of trading – SkyPeople reported financial results for Q1 2010 (quarter ending March 31, 2010).21

iii. August 16, 2010, before the start of trading – SkyPeople reported financial results for Q2 2010 (quarter ending June 30, 2010).22

iv. November 15, 2010, after the close of trading – SkyPeople reported financial results for Q3 2010 (quarter ending September 30, 2010).23

v. March 31, 2011, after the close of trading – SkyPeople reported financial results for Q4 2010 and fiscal 2010 (quarter and fiscal year ending December 31, 2010).24

vi. May 16, 2011, after the close of trading – SkyPeople reported financial results for Q1 2011 (quarter ending March 31, 2011).25

68. Because the earnings announcements on March 31, 2010, May 17, 2010, November 15,

2010, March 31, 2011, and May 16, 2011, were each after the close of trading, for each of

these five events the trading day on which the new information would have impacted the

SkyPeople stock price would have been the following day. Consequently, for testing

purposes, the event dates are April 1, 2010; May 18, 2010; August 16, 2010; November 16,

2010; April 1, 2011; and May 17 2011.

69. There may have been additional material information aside from earnings information

disseminated on these event dates to which the stock price reacted. For example,

20 “SkyPeople Fruit Juice Reports Record Results for the Fourth Quarter and Full Year 2009,” PR Newswire, March 31, 2010. 21 “SkyPeople Fruit Juice Reports Record Financial Results for the First Quarter 2010,” PR Newswire, May 17, 2010. 22 “SkyPeople Fruit Juice Reports $13.4 Million in Revenues and $0.22 in EPS for the Second Quarter 2010,” PR Newswire, August 16, 2010. 23 “SkyPeople Fruit Juice Reports Record Revenues in Third Quarter 2010,” PR Newswire, November 15, 2010. 24 “SkyPeople Fruit Juice Reports Record 2010 Financial Results; $93.2 Million in Revenues, Net Income of $21.2 Million and EPS of $0.92; Capacity expansion projects to drive incremental growth in 2011,” PR Newswire, March 31, 2011. 25 “SkyPeople Fruit Juice Reports First Quarter 2011 Financial Results,” PR Newswire, May16, 2011.


SkyPeople routinely announced forward guidance on earnings announcement dates. Stock

price reactions to such additional information would be further confirmation of market

efficiency, as that information would be illuminative of the projected future financial

condition of the Company.

70. Announcements of financial results and guidance sometimes constitute unexpected good

news and sometimes constitute unexpected bad news. If a stock price rises in value

following unexpected good news and falls following unexpected bad news – that is, reacts

quickly to new material information – then the dispersion of returns in a sample of such

days would differ significantly from the dispersion of returns in the sample of all other

days.

71. Dispersion is measured by the statistical standard deviation of the distribution of returns.

Standard deviation shows how much variation (or dispersion) exists in sample data points

from the average (mean). A low standard deviation indicates that sample data points tend

to be very close to the mean, while a high standard deviation indicates that sample data

points are spread out over a wide range of values around the mean.

72. I conducted two tests to determine whether the standard deviation of SkyPeople returns on

earnings announcement days was significantly different from the standard deviation of

SkyPeople returns on all other days in the Class Period: an F-test and an Ansari-Bradley

test, both described below. I ran both tests on the “residual returns” for SkyPeople’s

common stock, that is the computed portion of the stock returns remaining after controlling

for the impact of market and peer group effects. The computation of residual returns is

described below in the Event Study section of this report. Running the tests on residual

returns focuses the tests more precisely on the effects of Company-specific information on

the Company stock price.

F-Test

73. If the F-test finds that the volatility of earnings days’ returns is significantly greater than

the volatility of returns for all other days, then the price of SkyPeople common stock

moved more on earnings days than on other days. Earnings days are, by definition, days in

which new material information was released. If SkyPeople’s stock price moved more on

news days than on days in which no news was released, then there was a cause-and-effect


relationship between the release of new information and reactions in the price of SkyPeople

common stock, which establishes that SkyPeople common stock traded in an efficient

market.

74. The sample standard deviation of the earnings announcement day residual returns was

7.19%. The sample standard deviation of all other days’ residual returns was 3.55%.

Clearly, the earnings announcement days’ sample standard deviation was greater than the

sample standard deviation for all other days – over two times greater. This means that,

compared with all other days’ residual returns, the earnings announcement day residual

returns are much more dispersed (spread out over a wide range of values relative to the

mean), indicating that SkyPeople common stock price consistently reacted to new, material

information contained within earnings announcements during the Class Period.

75. An F-test assesses whether the difference between the two sample standard deviations is

statistically significant, or alternatively, a potentially random result. The F-statistic for

these two samples is 4.09, which is greater than the 95% confidence level critical F-statistic

value of 2.25 (for a one-tail F-test with 5 and 289 degrees of freedom), indicating that the

difference in sample standard deviations is statistically significant, to a high degree of

certainty. The probability of obtaining this result is less than one in five hundred.

76. The F-test finds that the volatility of earnings days’ returns is significantly greater than the

volatility of returns for all other days. This result demonstrates that the price of SkyPeople

common stock moved more on earnings days than on other days. This statistical result

confirms that there was a cause-and-effect relationship between the release of new

information and reactions in the SkyPeople common stock price, which therefore

establishes that SkyPeople common stock traded in an efficient market during the Class

Period.

Ansari-Bradley Test

77. The Ansari-Bradley test is another test that determines whether two data samples have the

same or significantly different dispersions (i.e. standard deviation in the distribution of

returns). The Ansari-Bradley test is a well regarded and generally accepted test for this


purpose and is presented and described in numerous authoritative textbooks.26 Unlike the

F-test, which is commonly used to test for differences in standard deviations, the Ansari-

Bradley test makes no assumption about the normality of the return distributions.27

78. Applied to the earnings announcement returns and the sample of all other returns observed

during the Class Period, the Ansari-Bradley test, like the F-test, finds with an extremely

high degree of statistical certainty that the volatility of earnings announcement day returns

was significantly greater than the volatility of returns on all other days. The Ansari-

Bradley C-statistic for the two samples of SkyPeople stock residual returns is

-3.25, the absolute value of which is greater than the critical C-statistic threshold of 1.96

for significance at the 95% confidence level. The likelihood that this result was on account

of random chance is virtually nil. This result is further proof that the price of SkyPeople

common stock moved more on earnings announcement days than on other days during the

Class Period.

79. This statistical test result indicates that there was a cause-and-effect relationship between

the release of new information and reactions in the SkyPeople common stock price, which

therefore establishes that SkyPeople common stock traded in an efficient market during the

Class Period.

Event Study

80. The event study is the paramount tool for testing market efficiency, as Eugene Fama

attests:

“The cleanest evidence on market-efficiency comes from event studies, especially event studies on daily returns. When an information event can be dated precisely and the event has a large effect on prices, the way one abstracts from expected returns to measure abnormal daily returns is a

26 For example: Practical Nonparametric Statistics, 2nd edition, by J.W. Conover, John Wiley & Sons, 1980; Applied Nonparametric Statistics, by Wayne W. Daniel, Houghton Mifflin, 1978; Nonparametric Statistical Methods, by Wolfe Hollander, John Wiley & Sons, 1973; Beyond ANOVA: Basics of Applied Statistics, by Rupert, G. Miller, Jr., John Wiley & Sons, 1986; and Biostatistical Analysis, 3rd edition, by Jerrold H. Zar, Prentice-Hall, 1996. 27 In this particular case, however, the F-test gives the same result as the Ansari-Bradley test, which is that the event day return distribution has significantly greater volatility than does the return distribution for all other days – indicating market efficiency.


second-order consideration. As a result, event studies give a clear picture of the speed of adjustment of prices to information.” “Efficient Capital Markets: II,” by Eugene F. Fama, Journal of Finance, 1991, p. 1607.

81. Event study analysis is one of the most commonly used analytic methodologies employed

by finance researchers. Campbell, Lo, and MacKinlay [1997] present an excellent

description and examples of the methodology and write about how it is generally accepted

and widely used in academic research.28 Tabak and Dunbar [2001] write about how the

methodology is generally accepted and widely used in forensic applications.29

82. An event study measures how much a stock price rises or falls in response to new

information on specific days when unexpected news is released. It first determines how

much of a stock price change cannot be explained by market and peer group factors. The

portion of a stock price change that cannot be attributable to market and peer group factors

is called the residual stock price movement or “residual return.” The event study isolates

the residual return and also tests whether the residual return can reasonably be explained as

merely a random fluctuation.

83. If the stock return over an event period is statistically significant, it indicates that the stock

price movement cannot be attributed to market and peer group factors, or to random

volatility, but rather was likely caused by company-specific information. Such proof of a

cause-and-effect relationship between new material information and the reaction in the

stock price establishes market efficiency.

84. It is important to note that an event study tests the joint hypothesis that the security trades

in an efficient market and that the valuation impact of the information disseminated on

each specific event date is of such magnitude as to exceed the threshold for statistical

significance.

28 Chapter 4 of The Econometrics of Financial Markets, by John Y. Campbell, Andrew W. Lo, and A. Craig MacKinlay, Princeton University Press, 1997. 29 “Materiality and Magnitude: Event Studies in the Courtroom,” by David Tabak and Frederick Dunbar, in Litigation Services Handbook, 3rd edition, John Wiley & Sons, New York, 2001.


Selection of Events

85. For an event to be appropriate for inclusion in the event study, the information released

should be new, unexpected, and sufficiently important to reasonably expect that it could

cause a large movement in the price of SkyPeople common stock.

86. By focusing the event study on disclosures of information related to the alleged fraud, I can

ascertain whether the market for SkyPeople stock was efficient with respect to the

particular information at issue in this case. That is, if the event study proves that SkyPeople

common stock declined in a statistically significant fashion on the allegedly corrective

disclosure days, I can determine that the market for SkyPeople common stock was

specifically efficient in relation to the alleged fraud. Consequently, the empirical behavior

of SkyPeople common stock following these disclosures is important for determining

whether the market for SkyPeople common stock was efficient for purposes of the fraud-

on-the-market principle.

87. A comprehensive identification of all disclosures of information related to the alleged fraud

is beyond the scope of this report, and is properly addressed in an analysis of loss causation

and damages. However, the Complaint and a review of Class Period events identify certain

dates on which Company-specific information was disseminated that appears to be partially

corrective of the alleged misrepresentations and omissions.

88. The following is a list of the event dates selected using the described criteria, along with a

brief summary of the disclosures that were made:

i. April 1, 2011 – That day, the Company issued its 10-K for the Fiscal Year ended

December 31, 2010. In the filing, SkyPeople disclosed that the acquisition of

Yingkou on November 25, 2009, was a related party transaction that the Company

had failed to classify, as required by law, in its prior SEC filings.30 Further,

SkyPeople disclosed that management had determined this failure of oversight

constituted a material weakness in the Company’s disclosure controls and

procedures.31

ii. June 1, 2011 – That day, Absaroka Capital Management published a research report

questioning, among other aspects of the Company’s business, discrepancies

30 SkyPeople Fruit Juice form 10-K for the Fiscal Year ended December 31, 2010, filed April 1, 2011, p. 47. 31 SkyPeople Fruit Juice form 10-K for the Fiscal Year ended December 31, 2010, filed April 1, 2011, p. 47.


between SAIC filings filed by SkyPeople with the government of China, and SEC

filings filed by SkyPeople with the government of the United States.32

Isolating the Impact of Company-Specific Information

89. Event study analysis determines how much of the Company’s stock return following each

of the events was driven by Company-specific information as opposed to the market and

peer group factors.

90. The method, which is generally accepted and widely used in econometric modeling,

involves running a regression to determine how SkyPeople common stock typically

behaved in relation to the overall stock market and its peer group, and then using the

regression model to determine how much of each event day’s actual return is explained by

the market and peer group factors (“the explained return”).

91. The explained return is then subtracted from the actual return, to isolate the residual return,

which is the stock’s return after controlling for market and peer group effects.

92. I ran a regression modeling the return of SkyPeople common stock as a function of: 1) a

constant term, 2) the returns of the overall stock market, and 3) a peer group index return.

93. For the overall stock market factor I used the CRSP Market Total Return Index (“Market

Index”), which is a generally accepted and widely used measure of the overall stock market

performance. The CRSP Market Total Return Index appropriately incorporates payment of

dividends by the constituent companies.

94. For the peer group factor I used the Chicago Board Options Exchange (“CBOE”) China

Index (“China Index”), which captures the returns of Chinese companies with stock listed

on U.S. exchanges.33

95. The index levels and returns of the Market Index and the Peer Index are presented in

Exhibit-5.

96. I ran the regression on daily returns covering the entire Class Period, using dummy

variables to control for potentially abnormal returns on the event dates being tested in the

event study as well as on earnings announcement dates during the Class Period. Using

dummy variables to control for extraordinary events in the estimation period, so that the

32 “Pulp Fiction,” by Kevin Barnes, Absaroka Capital Management, analyst report, June 1, 2011. 33 “Futures on the CBOE China Index (CX) Managing Exposure in the Emerging Market,” CBOE China Index description, http://cfe.cboe.com/GENERAL/CXQRG.pdf, accessed August 18, 2012.


model parameters properly reflect typical stock price movements, is a widely used and

generally accepted methodology.34

97. All returns used in the event study are logarithmic returns – that is, the natural logarithm of

the ratio of the current day’s closing price plus dividends to the previous day’s closing

price.35 Logarithmic returns are commonly used in event studies and equity analysis.

Analysts and researchers generally use logarithmic returns instead of percent price changes

because of various computational advantages.

Regression Results

98. The regression results, presented in Exhibit-6, show that SkyPeople common stock returns

were significantly related to the returns of the Peer Index, but not the Market Index, when

included in the same regression model. Apparently, the regression model for SkyPeople’s

stock return picks up the market effect through the peer group effect, which is correlated

with the overall market. As expected in situations where there is a large degree of cross-

correlation, the Market Index appears to not be significantly related to the Company’s stock

returns when included with the Peer Index in the same regression. This is not an

uncommon pattern in econometric modeling of stock returns.

99. Nonetheless, the regression analysis removes the market and industry effects, isolating the

impact of Company-specific information on SkyPeople’s common stock.

100. I computed the explained portion of the SkyPeople common stock returns by adding: 1)

the estimated regression intercept term of -0.276%, 2) the respective day’s Market Index

return multiplied by the regression’s Market Index coefficient of 0.175, and 3) the Peer

Index return multiplied by the regression’s Peer Index coefficient of 0.488. The residual

return is the actual return minus the explained return, and, which represents the portion of

34 See, for example: “Event Studies with a Contaminated Estimation Period,” by Nihat Aktas, Eric de Bodt, and Jean-Gabriel Cousin, Journal of Corporate Finance, 2007; “Measuring the Effects of Regulation with Stock Price Data,” by John J. Binder, The RAND Journal of Economics, 1985; “Intervention Analysis with Applications to Economic and Environmental Problems,” by G. E. P. Box and G. C. Tiao, Journal of the American Statistical Association, 1975; “Testing for Market Efficiency: A Comparison of the Cumulative Average Residual Methodology and Intervention Analysis,” by David F. Larcker, Lawrence A. Gordon and George E. Pinches, Journal of Financial & Quantitative Analysis, 1980; “Measuring Abnormal Performance: The Event Parameter Approach Using Joint Generalized Least Squares,” by Paul H. Malatesta, The Journal of Financial and Quantitative Analysis, 1986; “Conditioning the Return-Generating Process on Firm-Specific Events: A Discussion of Event Study Methods,” by Rex Thompson, The Journal of Financial and Quantitative Analysis, 1985. 35 Appendix-1 presents the mathematical formula for the logarithmic return and a discussion of the measure.


SkyPeople common stock’s return that remains after removing the effects of the Market

Index and Peer Index.

t-test

101. For each event, a statistical test called a t-test was conducted to determine whether the

residual return can be explained by random volatility, or alternatively must have been

caused by Company-specific information. A t-test compares the residual return following

an event date to the typical residual returns exhibited in the estimation period. If the event

residual return is far greater (positively or negatively) than the typical residual return, the t-

test indicates that the residual return in question cannot have been caused by random

volatility alone – i.e., it is statistically significant.36

102. The event study results are presented below and summarized in Exhibit-7.

Event Study Results

April 1, 2011

103. On Friday, April 1, 2011, SkyPeople reported financial results for the fourth quarter of FY

2010. That same day, the Company also filed a 10-K with the SEC detailing those financial

results and its financial position as of December 31, 2010.

104. In its 10-K filing, SkyPeople disclosed that it had determined the acquisition of Yingkou

was a related party transaction. The nature of this transaction had not been acknowledged

on prior financial statements. According to the SkyPeople, the failure to disclose this issue

constituted a “material weakness.”

36 The test is called the t-test because it involves the computation of a t-statistic. For a 1-day event window, the t-statistic is the one-day residual return divided by the standard error of the regression residual returns. If the absolute value of the t-statistic is greater than the critical t-statistic value (1.96 for large samples), the likelihood that the residual return could have been caused by random volatility alone is less than 5%, which is generally accepted to be so unlikely that the random volatility explanation can be rejected.


“In connection with [the periodic evaluation of disclosures], management determined that the acquisition of Yingkou that was consummated in November 25, 2009 was a related party transaction that should have been subject to our policies and procedures governing related party transactions (Statement of Policies and Procedures with Respect to Related Party Transactions).…management determined that the failure to disclose the relevant affiliation while the transaction was pending was a material weakness in our disclosure controls and procedures.” SkyPeople Fruit Juice Form 10-K for the Fiscal Year Ended 31 December 2010, p. 47.

105. Analyst coverage published that day noted the risk that such a revelation presented, and

downgraded the assessment of SkyPeople common stock value as a result.

“Additionally, major deficiency identified in internal control and corporate governance warrants further scrutinization, in our view. …Material weakness in internal control. The company disclosed in its 10-K filed today that it has failed to disclose the Yingkou acquisition (11/25/2009) as a related party transaction to the Board and in its previous SEC filings as required. …Valuation discount reflects a dampened growth outlook and internal control concerns.” “SPU: Downgrading to NEUTRAL on Concerns over Slower Growth & Control Issues,” by Howzard Zhou and Nick Ning, Roth Capital Partners, analyst report, April 1, 2011 (emphasis in original).

106. On April 1, 2011, SkyPeople common stock fell 13.58% (on a logarithmic returns basis).

That day, the Market Index return was 0.54% and the Peer Index return was 1.54%.

According to the regression results, the explained return for SkyPeople common stock was

0.57% on April 1, 2011, and the residual return was -14.15%.

107. A residual return of -14.15% is an unusually large one-day return for SkyPeople common

stock. That residual return is associated with a t-statistic of -4.17, which indicates

statistical significance at the 0.004% significance level. That is, the likelihood of obtaining

a residual return of this magnitude and associated t-statistic is less than one in ten thousand.

Therefore, the common stock return is deemed statistically significant.

108. The magnitude of the residual return on April 1, 2011 and its statistical significance

indicate that to a high degree of statistical certainty, the price of SkyPeople common stock


decreased in response to the earnings announcement announced the previous day and the

material weakness disclosure released that day, precisely the information at issue in this

case.

June 1, 2011

109. On Wednesday, June 1, 2011, Absaroka Capital Management published a research report

accusing SkyPeople of misrepresenting the size of its business in its SEC filings. Absaroka

also alleged that SkyPeople had engaged in a myriad of questionable behaviors.

“In this initiating Coverage Report, Absaroka will present compelling evidence that SkyPeople has materially misrepresented its production volume, revenue, capital equipment, and profitability.

…

1. SkyPeople’s Chinese SAIC financials indicate the Company is less than 10% the size claimed in the United States SEC financials

2. Visits to all four of SkyPeople’s production factories found idle facilities with limited and antiquated production equipment; the facilities only operate in production mode for less than two months per year due to limited demand and inefficient production

3. SkyPeople does not own the largest kiwifruit plantation in Asia and is forced to source inputs for its factories from local farmers at high costs due to its relatively small size

4. Retail channel checks and discussions with SkyPeople’s distributors and customers make the company’s claims regarding product distribution and sales volume unbelievable. Many of the Company’s ‘customers’ claim to have done little or no business with the Company and Absaroka’s researches struggled to find the Company’s beverage products on store shelves

5. EBITDA margins, inventory turnover, accounts receivables, and selling/marketing costs seem particularly dubious relative to peers and indicate potential accounting shenanigans

6. A history of low-quality auditors raises significant concerns about validity of published financials and future business prospects”

“Pulp Fiction,” by Kevin Barnes, Absaroka Capital Management, 1 June 2011.

110. On June 1, 2011, the SkyPeople common stock return was -20.37% (on a logarithmic

returns basis). That day, the Market Index fell 2.37% and the Peer Index return fell 1.82%.

According to the regression results, the explained return for SkyPeople common stock was

-1.58% on June 1, 2011, and the residual return was -18.80%.


111. A residual return of -18.80% is an unusually large one-day return for SkyPeople common

stock. That residual return is associated with a t-statistic of -5.53, which indicates that the

residual return was too severe to have been a random fluctuation. The probability that a

residual return of this magnitude and associated t-statistic could be caused by random

volatility alone is less than one in ten million. Therefore, the common stock return is

deemed statistically significant.

112. The magnitude of the residual return on June 1, 2011 and its statistical significance indicate

that to a high degree of statistical certainty, the price of SkyPeople common stock

decreased in response to the Absaroka Capital Management report and allegations of fraud

issued that day, the information at the heart of this case.

Event Study Summary

113. The event study results show that during the Class Period, SkyPeople common stock

reacted appropriately in response to the release of new information. On both event dates

tested, SkyPeople common stock exhibited statistically significant returns in response to

information related to the alleged misdeeds at the heart of the case. This relationship

between the release of information and movements in the stock price demonstrates that the

market for SkyPeople common stock was efficient during the Class Period.

Empirical Analysis Summary

114. The F-test, Ansari-Bradley test, and event study results show that SkyPeople common

stock reacted appropriately and consistently in response to new, material information being

released throughout the Class Period. These results demonstrate that the market for

SkyPeople common stock was efficient throughout the Class Period.

SUMMARY

115. SkyPeople common stock traded on the NASDAQ and numerous market makers facilitated

trading in SkyPeople common stock. The Company was covered by analysts. Institutional

ownership of SkyPeople common stock was widespread. Trading was active.

116. Not only did the market for SkyPeople common stock satisfy the Cammer factors that

indicate market efficiency, but it also satisfied the empirical Cammer factor, which


demonstrates the essence of market efficiency. The event study and F-test proved that

there was a consistent cause and effect relationship between the release of information and

movements in the SkyPeople common stock price.

117. Thus, I conclude that SkyPeople common stock traded in an efficient market over the

course of the Class Period.

LIMITING FACTORS

118. This report is furnished solely for the purpose of court proceedings in the above named

matter and may not be used or referred to for any other purpose. The analysis and opinions

contained in this report are based on information available as of the date of this report. I

reserve the right to supplement or amend this report, including in the event additional

information becomes available.

Gang Hu, Ph.D., CFA


APPENDIX-1: LOGARITHMIC RETURNS

Logarithmic returns, rather than percent change returns are commonly used in stock return regressions and event study analysis and were used in the regression modeling here. The formula for a logarithmic return is:

1

lnt

ttt P

dPR

where: Rt is the logarithmic return on day t; Pt is the stock price at the end of day t; Pt-1 is the stock price from the previous day, day t-1; dt is the dividend on day t, if any.

The formula for converting a logarithmic return into a dollar return is: )1(1

tRtt ePDR

where: DRt is the dollar return on day t; Pt-1 is the stock price from the previous day, day t-1; e is natural e (approximately 2.7); Rt is the logarithmic return on day t.

If a stock falls from $20 to $18, the percent change in price is -10%, equal to the $2 decline divided by the original $20 price. The logarithmic return, however, is -10.54%, equal to ln($18/$20).

The logarithmic return relates a price change to an average of the original, final, and intervening prices over the course of a price decline. As such, for large price declines, it is possible for a logarithmic price decline to exceed 100%, since the price decline may be greater than the average of the beginning and ending prices.

An attractive feature of a logarithmic return is that it can be decomposed linearly into contributing factors. That is, the portion of a logarithmic return caused by company-specific information is isolated by subtracting from the total logarithmic return the portion of the total return caused by market and peer group factors.


Exhibit-1

Documents Received, Reviewed, and Relied Upon

LEGAL DOCUMENTS

Consolidated Amended Class Action Complaint, filed November 28, 2011.

NEWS ARTICLES

Factiva news articles (435) from 31 March 2009 to 30 May 2012 downloaded using the following search parameters: Company: “SkyPeople Fruit Juice, Inc.”; Sources Field: all sources.“SkyPeople Fruit Juice Reports Record Results for the Fourth Quarter and Full Year 2009,” PR Newswire, March 31, 2010.“SkyPeople Fruit Juice Reports Record Financial Results for the First Quarter 2010,” PRNewswire, May 17, 2010.“SkyPeople Fruit Juice Reports $13.4 Million in Revenues and $0.22 in EPS for the Second Quarter 2010,” PR Newswire, August 16, 2010.“SkyPeople Fruit Juice Reports Record Revenues in Third Quarter 2010,” PR Newswire,November 15, 2010. “SkyPeople Fruit Juice Reports Record 2010 Financial Results; $93.2 Million in Revenues, Net Income of $21.2 Million and EPS of $0.92; Capacity expansion projects to drive incremental growth in 2011,” PR Newswire, March 31, 2011.“SkyPeople Fruit Juice Reports First Quarter 2011 Financial Results,” PR Newswire,May 16, 2011.

ANALYST REPORTS

Roth Capital Partners, April 1, 2010. Roth Capital Partners, May 14, 2010.Roth Capital Partners, May 18, 2010.Roth Capital Partners, August 17, 2010. Roth Capital Partners, August 18, 2010.Roth Capital Partners, August 26, 2010.Roth Capital Partners, November 12, 2010. Roth Capital Partners, November 17, 2010. Roth Capital Partners, November 18, 2010. Roth Capital Partners, March 30, 2011.Roth Capital Partners, April 1, 2011. Roth Capital Partners, May 18, 2011.


Exhibit-1


Absaroka Capital Management, June 1, 2011.

SEC FILINGS

SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2009. SkyPeople Fruit Juice, Inc. Form S-1A, filed January 20, 2010. SkyPeople Fruit Juice, Inc. Form 25, filed April 19, 2010. SkyPeople Fruit Juice, Inc. Form 8-A12B, filed April 19, 2010. SkyPeople Fruit Juice, Inc. Form S-1, filed April 20, 2010. SkyPeople Fruit Juice, Inc. Form S-1A, filed April 30, 2010. SkyPeople Fruit Juice, Inc. Form 10-Q, filed May 17, 2010. SkyPeople Fruit Juice, Inc. Form S-1A, filed May 24, 2010. SkyPeople Fruit Juice, Inc. Form S-1A, filed June 4, 2010. SkyPeople Fruit Juice, Inc. Form DEF 14A, filed June 8, 2010. SkyPeople Fruit Juice, Inc. Form S-1A, filed June 23, 2010. SkyPeople Fruit Juice, Inc. Form AW, filed June 23, 2010. SkyPeople Fruit Juice, Inc. Form POS AM, filed June 25, 2010. SkyPeople Fruit Juice, Inc. Form AW, filed July 8, 2010. SkyPeople Fruit Juice, Inc. Form AW WD, filed July 8, 2010. SkyPeople Fruit Juice, Inc. Form 10-Q, filed August 16, 2010. SkyPeople Fruit Juice, Inc. Form S-1A, filed August 16, 2010. SkyPeople Fruit Juice, Inc. Form 424B1, filed August 26, 2010. SkyPeople Fruit Juice, Inc. Form 10-Q, filed November 15, 2010. SkyPeople Fruit Juice, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010. SkyPeople Fruit Juice, Inc. Form 10-KA for the Fiscal Year Ended December 31, 2010.SkyPeople Fruit Juice, Inc. Form 12b-25, filed April 1, 2011. SkyPeople Fruit Juice, Inc. Form 10-Q, filed May 16, 2011. SkyPeople Fruit Juice, Inc. Form DEF 14A, filed July 25, 2011. SkyPeople Fruit Juice, Inc. Form 10-Q, filed August 15, 2011. SkyPeople Fruit Juice, Inc. Form 10-QA, filed August 22, 2011. SkyPeople Fruit Juice, Inc. Form 10-Q, filed November 14, 2011.

ACADEMIC AND PROFESSIONAL LITERATURE

Aktas, Nihat, Eric de Bodt, and Jean-Gabriel Cousin, “Event Studies with a Contaminated Estimation Period,” Journal of Corporate Finance, 2007. Ball, Ray, and Stephen J. Brown, “An Empirical Evaluation of Accounting Income Numbers,” Journal of Accounting Research, 1968.


Exhibit-1


Ball, Ray, “Anomalies in Relationships Between Securities’ Yield and Yield-Surrogates,” Journal of Financial Economics, 1978. Ball, Ray, and S. P. Kothari, “Security Returns around Earnings Announcements,” TheAccounting Review, 1991. Barber, Brad M., Paul A. Griffin, and Baruch Lev, “The Fraud-on-the-Market Theory and the Indicators of Common Stock Efficiency,” Journal of Corporation Law, 1994. Beaver, William H., “The Information Content of Annual Earnings Announcements” Journal of Accounting and Research, 1968. Beaver, William H., Financial Reporting an Accounting Revolution, 3rd edition, 1998. Binder, John J., “Measuring the Effects of Regulation with Stock Price Data,” The RAND Journal of Economics, 1985. Box, G.E.P., and G.C. Tiao, “Intervention Analysis with Applications to Economic and Environmental Problems,” Journal of the American Statistical Association, 1975. Campbell, John Y., Andrew W. Lo and A. Craig MacKinaly, The Econometrics of Financial Markets, Princeton University Press, 1997. Degeorge, Francois, Jayendu Patel, and Richard Zeckhauser, “Earnings Management to Exceed Thresholds,” Journal of Business, 1999.Chen, Hailiang, Prabuddha De, Yu Hu, and Byoung-Hyoun Hwang, “Customers As Advisors: The Role of Social Media in Financial Markets,” Working Paper, 2012. Conover, W. J., Practical Nonparametric Statistics, 2nd edition, John Wiley & Sons,1980.Daniel, Wayne W., Applied Nonparametric Statistics, Houghton Mifflin, 1978.Fama, Eugene F., “Efficient Capital Markets: II,” Journal of Finance, 1991. Gerlach, Jeffrey R., and Jae H. Lee, “How Information Transmits to Equity Markets: Earnings Announcements and Volatility,” Working Paper, Sungkyunkwan University, 2010.Hollander, Wolfe, Nonparametric Statistical Methods, John Wiley & Sons, 1973. Larcker, David F., Lawrence A. Gordon, and George E. Pinches, “Testing for Market Efficiency: A Comparison of the Cumulative Average Residual Methodology and Intervention Analysis,” The Journal of Financial and Quantitative Analysis, 1980. Malatesta, Paul H., “Measuring Abnormal Performance: The Event Parameter Approach Using Joint Generalized Least Squares,” The Journal of Financial and Quantitative Analysis, 1986. Miller, Rupert G. Jr., Beyond ANOVA, Basics of Applied Statistics, John Wiley & Sons, 1986.Patell, James M., and Mark A. Wolfson, “The intraday speed of adjustment of stock prices to earnings and dividend announcements,” Journal of Financial Economics, 1984. Tabak, David, and Frederick Dunbar, “Materiality and Magnitude: Event Studies in the Courtroom,” Litigation Services Handbook, 3rd edition, John Wiley & Sons, 2001.


Exhibit-1


Thompson, Rex, “Conditioning the Return-Generating Process on Firm-Specific Events: A Discussion of Event Study Methods,” The Journal of Financial and Quantitative Analysis, 1985. Tumarkin, Robert, “Internet Message Board Activity and Market Efficiency: A Case Study of the Internet Service Sector using RagingBull.com,” Financial Markets,Institutions, & Instruments, volume 11, issue 4, November 2002. Watts, Ross L. “Systematic Abnormal Returns After Quarterly Earnings Announcements” Journal of Financial Economics, 1978. Zar, Jerrold H., Biostatistical Analysis, 3rd edition, Prentice-Hall, 1996.

DATA

Bloomberg. Capital IQ. Center for Research in Security Prices (CRSP). Factiva. Thomson Research. Vickers.

LEGAL CASES

Basic, Inc. v. Levinson, 485 U.S. 224 (1988). Cammer v. Bloom, 711 F. Supp. 1264 (D.N.J., 1989). Erica P. John Fund, Inc. v. Halliburton Co., 133 S. Ct. 2179 (2011). Amgen Inc., et al. v. Connecticut Retirement Plans, 133 S. Ct. 1184 (2013).

OTHER

SeekingAlpha.com“Eligibility of Smaller Companies to Use Form S-3 or F-3 for Primary Securities Offerings,” U.S. Securities and Exchange Commission, January 28, 2008.“Futures on the CBOE China Index (CX) Managing Exposure in the Emerging Market,” CBOE China Index description, http://cfe.cboe.com/GENERAL/CXQRG.pdf, accessed August 18, 2012. “Revisions to the Eligibility Requirements for Primary Securities Offerings on Forms S-3 and F-3,” obtained from http://www.sec.gov/rules/final/2007/33-8878.pdf.SEC.govAny other documents and data cited in the report.


Exhibit-2

Curriculum Vitae Gang Hu, Ph.D., CFA

June 2013

Babson College223 Tomasso HallWellesley, MA 02457

Phone: 781-239-4946E-mail: [email protected]

Web: http://faculty.babson.edu/ghu/

EXPERIENCE

Babson College, Finance Division. Wellesley, MA. Associate Professor (with tenure), 2011-present. Zwerling Family Endowed Term Chair in Finance, 2013-present. Assistant Professor, 2005-2011. Fidelity Term Chair, 2005-2010.

Crowninshield Financial Research. Wellesley, MA. Affiliated Expert, 2012-present.

Fidelity Management & Research Company, Global Equity Trading. Boston, MA. Quantitative Trade Analyst, 2001-2003. Intern, 2000.

EDUCATION

Ph.D. in Finance, Boston College, 2005. Dissertation: “Essays in Corporate Finance and Institutional Trading”.

CFA (Chartered Financial Analyst), CFA Institute, 2003.

Doctoral Program in Operations and Decision Sciences, University of Pittsburgh, 1996-1998.

B.E. in System Engineering, Tianjin University, China, 1996.

AWARDS AND GRANTS

Babson College Faculty Scholarship Award, 2010.

Western Finance Association (WFA) NASDAQ Award for the Best Paper on Capital Formation, Big Sky, MT, 2007.

1st Prize, Chicago Quantitative Alliance (CQA) Annual Academic Competition, 2007.

Yale School of Management, Millstein Center for Corporate Governance & Performance, Research Grant, 2007.

INQUIRE Europe (Institute for Quantitative Investment Research) Research Grant, 2006.

WFA NYSE PhD Student Travel Grant, Portland, OR, 2005.

Best Paper Award, Derivatives/Microstructure, Eastern Finance Association (EFA) Meeting, Norfolk, VA, 2005.

Morgan Stanley Equity Microstructure Research Grant, 2004.


Exhibit-2


REFEREED JOURNAL PUBLICATIONS

1. “The Year-End Trading Activities of Institutional Investors: Evidence from Daily Trades,” with R. David McLean, Jeffery Pontiff, and Qinghai Wang, Review of Financial Studies,accepted conditional on minor revision. - AFA 2010.

2. “Institutional Investors and the Information Production Theory of Stock Splits,” with Thomas Chemmanur and Jiekun Huang, Journal of Financial and Quantitative Analysis,forthcoming. - Featured in the Harvard Law School Forum on Corporate Governance and Financial

Regulation.

3. “Underestimation of Securities Fraud Aggregate Damages Due to Inter-Fund Trades,” with Steven Feinstein, Mark Marcus, and Zann Ali, Journal of Forensic Economics,forthcoming.

4. “OLIVE: A Simple Method for Estimating Betas When Factors Are Measured with Error,” with J. Ginger Meng and Jushan Bai, Journal of Financial Research 34, 2011, 27-60.

5. “The Role of Institutional Investors in Initial Public Offerings,” with Thomas Chemmanur and Jiekun Huang, Review of Financial Studies 23, 2010, 4496-4540. - WFA 2007 NASDAQ Award. - Cited in SEC Chairman’s response letter to an inquiry by Congress.

6. “Costly Arbitrage and Idiosyncratic Risk: Evidence from Short Sellers,” with Ying Duan and R. David McLean, Journal of Financial Intermediation 19, 2010, 564-579.- WFA 2006, 1st Prize Chicago Quantitative Alliance 2007 Academic Competition.

7. “Is Dividend Smoothing Universal? New Insights from a Comparative Study of Dividend Policies in Hong Kong and the U.S.,” with Thomas Chemmanur, Jie He, and Helen Liu, Journal of Corporate Finance 16, 2010, 413-430.

8. “The Role of Institutional Investors in Seasoned Equity Offerings,” with Thomas Chemmanur and Shan He, Journal of Financial Economics 94, 2009, 384-411.- AFA 2006, NBER 2007.

9. “Measures of Implicit Trading Costs and Buy-Sell Asymmetry,” Journal of Financial Markets 12, 2009, 418-437. - WFA 2005 NYSE PhD Student Travel Grant, EFA 2005 Best Paper Award.

10. “The Market for Shareholder Voting Rights Around Mergers and Acquisitions: Evidence from Institutional Daily Trading and Voting,” with Jennifer Bethel and Qinghai Wang, Journal of Corporate Finance 15, 2009, 129-145.


Exhibit-2


11. “When is Stock Picking Likely to be Successful? Evidence from Mutual Funds,” with Ying Duan and R. David McLean, Financial Analysts Journal 65, 2009, 55-66.

12. “Opinion Divergence Among Professional Investment Managers,” with J. Ginger Meng and Mark Potter, Journal of Business Finance and Accounting 35, 2008, 679-703.

13. “Screening Location Strategies to Reduce Exchange Rate Risk,” with Timothy Lowe and Richard Wendell, European Journal of Operational Research 136, 2002, 573-590.

14. “Ranking by Eigenvector Versus Other Methods in the Analytic Hierarchy Process,” with Thomas Saaty, Applied Mathematics Letters 11, 1998, 121-125.

OTHER PUBLICATIONS

15. “Emerging Issues in Evaluating Market Efficiency,” with Mark Marcus, Law360,Securities and Class Action Expert Analysis section, 2012.

16. “Stock Repurchases and Splits” (in Chinese), with J. Ginger Meng, in “Volume of Finance - Series on the Frontiers of Western Research in the Humanities and Social Sciences,” Huimin Li and Dongmin Ke (editors), China Renmin University Press, Beijing, China, 2011, Chapter 18, 471-496.

17. “Legal and Economic Issues in Litigation Arising from the 2007-2008 Credit Crisis,” with Jennifer Bethel and Allen Ferrell, in “Prudent Lending Restored: Securitization after the Mortgage Meltdown,” Yasuyuki Fuchita, Richard Herring, and Robert Litan (editors), Brookings Institution Press, Washington DC, 2009, Chapter 5, 163-235. - Translated and published in Chinese (Comparative Studies 39, December 2008, 54-96,

China CITIC Press) and Japanese (Nomura Institute of Capital Markets Research). - Featured in the Harvard Law School Forum on Corporate Governance and Financial

Regulation.

18. “An Analysis of Liquidity Across Markets: Execution Costs on the NYSE versus Electronic Markets,” with Michael Goldstein and J. Ginger Meng, in “Liquidity, Interest Rates and Banking,” Jeffrey Morrey and Alexander Guyton (editors), Nova Science Publishers, New York, 2009, Chapter 7, 139-167.

19. “VWAP Cost Excluding Own Trades,” Journal of Trading 2, Winter 2007, 30-34.

20. “Window Dressing by Institutional Investors,” with Jaime Villa, Babson Insight, 2007.


Exhibit-2


21. “A Comparative Analysis of Contributing Factors to Successful Entrepreneurship in Japan, USA, and China: The Importance of Psychological Attributes” (in Japanese), with Toyoaki Nishida and Makoto Ohtsu, in “Comparative Study of Entrepreneurship in Japan, USA, and China,” edited by Makoto Ohtsu and others, Soseisha, Tokyo, Japan, 2007, Chapter 3, 53-91. - Short English version appeared in Japanese Association of Administrative Science, 9th

Annual Convention Conference Proceedings, 290-293, Nagoya University, 2006.

WORKING PAPERS

“Do Institutional Investors Have Private Information about CEO Turnovers?,” with Thomas Chemmanur and Yingzhen Li.

“Can Transient Institutions Correctly Interpret Small Negative Earnings Surprises in the Absence of Access to Management’s Private Information?,” with Bin Ke and Yong Yu.

“Decomposing IPO Initial Returns in China’s ChiNext Market: The Stochastic Frontier Approach,” with J. Ginger Meng, Wei Zhang, and Gaofeng Zou.

“Disentangling GAAP Difference and Accounting Falsification of Financial Statement Discrepancies: A Study of Delisted Chinese Reverse Merger Companies in the U.S.” withYimiao Chen, Ling Lin, and Min Xiao.

“Does the January Anomaly Survive in Equity Exchange-Traded Funds?” with Tony Ruan.

SELECTED WORK-IN-PROGRESS

“Trading by Crossing,” with Jennifer Conrad and Sunil Wahal.

CONFERENCES AND SEMINARS

“Do Institutional Investors Have Private Information about CEO Turnovers?”- European Finance Association (EFA) Meetings, Cambridge, UK, 2013. - Financial Management Association (FMA) Meeting, Chicago, 2013. - Southern Finance Association (SFA) Meeting, Puerto Rico, 2013.

“Do Fund Managers Try to Mislead Investors? Evidence from Year-End Trades”- American Finance Association (AFA) Annual Meeting, Atlanta, GA, 2010. - European Finance Association (EFA) Meetings, Bergen, Norway, 2009. - Financial Intermediation Research Society (FIRS) meetings, Prague, Czech, 2009. - Swiss Society for Financial Market Research Conference, Geneva, Switzerland, 2009.

“Institutional Investors and the Information Production Theory of Stock Splits”- China International Conference in Finance (CICF), Chongqing, China, 2012. - Boston Area Finance Symposium (BAFS), 2010. - Mid-Atlantic Research Conference in Finance (MARC), Philadelphia, 2009.


Exhibit-2


- Financial Management Association (FMA) Meeting, Dallas, 2008. - Asian FA-NFA International Conference, Japan, 2008. - Seminars (2009-2012): Babson College, Bentley University, City University of Hong

Kong, Indiana University, National University of Singapore, Purdue University, Shanghai Advanced Institute of Finance, University of Hong Kong, University of Illinois at Urbana-Champaign, University of Massachusetts Amherst, University of Notre Dame.

“Decomposing IPO Initial Returns in China’s ChiNext Market: The Stochastic Frontier Approach”

- Midwest Finance Association Annual Meeting, Chicago, 2013.

“Can Transient Institutions Correctly Interpret Small Negative Earnings Surprises in the Absence of Access to Management’s Private Information?”

- American Accounting Association (AAA) Financial Accounting and Reporting Section (FARS) Mid-Year Meeting, Tampa, FL, 2011.

- American Accounting Association (AAA) Annual Meeting, San Francisco, CA, 2010.

“Does the January Anomaly Survive in Equity Exchange-Traded Funds?”- Financial Management Association (FMA) Meeting, Reno, NV, 2009. - Financial Management Association (FMA) Asian Conference, Xiamen, China, 2009. - Financial Management Association (FMA) European Conference, Turin, Italy, 2009.

“The Role of Institutional Investors in Initial Public Offerings”- Western Finance Association (WFA) Meeting (NASDAQ Award for the Best Paper on

Capital Formation), Big Sky, MT, 2007. - Financial Management Association (FMA) Meeting, “Top-Ten Percent” Sessions, Salt

Lake City, UT, 2006. - European Finance Association (EFA) Meeting, Zurich, Switzerland, 2006. - Seminars (2004-2006): Babson College, Boston College, Fordham University,

University of Georgia, University of Memphis.

“Costly Arbitrage and Idiosyncratic Risk: Evidence from Short Sellers”- Chicago Quantitative Alliance (CQA) Fall Conference (1st Prize), Chicago, 2007. - Western Finance Association (WFA) Meeting, Keystone, CO, 2006. - Financial Management Association (FMA) Meeting, Salt Lake City, UT, 2006. - Seminars (2006-2009): Babson College, Binghamton University-SUNY, OTA Asset

Management, State Street Global Advisors-Advanced Research Center.

“The Role of Institutional Investors in Seasoned Equity Offerings”- National Bureau of Economic Research (NBER) Market Microstructure Meeting,

Boston, MA, 2007. - American Finance Association (AFA) Annual Meeting, Boston, MA, 2006. - European Finance Association (EFA) Meeting, Ljubljana, Slovenia, 2007. - Eastern Finance Association (EFA) Meeting, New Orleans, LA, 2007.


Exhibit-2


- Financial Management Association (FMA) Meeting, Chicago, IL, 2005. - Southern Finance Association (SFA) Meeting, Key West, FL, 2005.

“Measures of Implicit Trading Costs and Buy-Sell Asymmetry”- Western Finance Association (WFA) Meeting (NYSE PhD Student Travel Grant),

Portland, OR, 2005. - Eastern Finance Association (EFA) Meeting (Best Paper Award), Norfolk, VA, 2005. - Southern Finance Association (SFA) Meeting, Key West, FL, 2005. - Financial Management Association (FMA) Meeting, FMA Doctoral Student Seminar

and Special PhD Paper Session, New Orleans, LA, 2004. - Seminars (2003-2005): Babson College, Boston College, California State University

Fullerton, University of Connecticut, Abel/Noser Corporation, Fidelity Investments,Goldman Sachs.

“The Market for Shareholder-Voting Rights Around Mergers and Acquisitions: Evidence from Institutional Daily Trading and Voting”

- Conference and Special Issue of the Journal of Corporate Finance on Corporate Control, Mergers and Acquisitions, Atlanta, GA, 2008.

- Financial Management Association (FMA) Meeting, Dallas, 2008. - Shareholder and Corporate Governance Conference, organized by Yale University and

Oxford University, 2007.

“Legal and Economic Issues in Litigation Arising from the 2007-2008 Credit Crisis”- Brookings-Tokyo Club-Wharton Conference, Prudent Lending Restored: Securitization

After the 2007 Mortgage Securities Meltdown, Washington DC, 2008.

“When is Stock Picking Likely to be Successful? Evidence from Mutual Funds”- Financial Management Association (FMA) Meeting, Chicago, IL, 2005. - Northern Finance Association (NFA) Meeting, Vancouver, Canada, 2005. - Babson College Cutler Center for Investments and Finance Board Meeting, 2009.

“Opinion Divergence Among Professional Investment Managers”- Journal of Business Finance and Accounting Capital Markets Conference, University

of North Carolina at Chapel Hill, 2007. - Southern Finance Association (SFA) Meeting, Key West, FL, 2005.

OTHER PROFESSIONAL ACTIVITIES

Top 1% by downloads of all authors on Social Sciences Research Network (SSRN.com).

Boston Area Finance Symposium (BAFS) Organizing Committee, 2008-present (founding member).

Ad hoc referee for Journal of Financial and Quantitative Analysis, Journal of Financial Markets, Financial Management, Financial Review, Financial Analyst Journal, and Journal of Business Finance and Accounting.


Exhibit-2


Selected Babson College Services:- Chair, Finance Recruiting, 2011-2012. - Faculty Senate, 2009-2012. - Faculty Workload and Compensation Committee, 2011-2014. - Data Analytics Task Force, 2012-2013. - Faculty Advisor, Chinese Student Association, 2009-present. - Co-Chair, Finance Recruiting Committee, 2010-2011. - Organizer of Finance Seminar Series, 2006-2010. - Committee on Titles, 2010. - Dean of Faculty Nominating Committee, 2008. - Fidelity/Babson Affinity Committee, 2005-2007.

Babson Global Teaching Fellows Program, Faculty Mentor: - Nauman J. Amin, Institute of Business Administration (IBA), Pakistan, Spring 2012. - Yanzhao Tang, Xiamen University, China, Fall 2012.

Babson Honors Thesis Advisor: - Zann Ali (2011-2012), Lauren Garey (2011-2012), Yimiao Chen (2012-2013), Chia

Chou Pan (2013-2014).

Financial Management Association (FMA) Annual Meeting: Program Committee 2010,2009, 2007, 2006; Discussant 2006, 2005; Session Chair 2006.

Western Finance Association (WFA) Annual Meeting: Discussant 2006.

Eastern Finance Association (EFA) Annual Meeting: Session Chair and Organizer, 2012; Program Committee 2008, 2007, 2006; Discussant 2005; Session Chair 2005.

Southern Finance Association (SFA) Annual Meeting: Program Committee 2007, 2006; Discussant 2005; Session Chair 2005.

Midwest Finance Association (MFA) Annual Meeting: Program Committee 2013.

China International Conference in Finance (CICF): Discussant 2012.

The Chinese Finance Association (TCFA), Editorial Board, 2001-2004.

Passed two actuarial exams.

Member: American Finance Association (AFA), Western Finance Association (WFA), Financial Management Association (FMA), Eastern Finance Association (EFA), Southern Finance Association (SFA), CFA Institute, Boston Security Analysts Society (BSAS), and The Chinese Finance Association (TCFA).


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

3/30/2010 $5.98 151,4003/31/2010 $5.99 364,800 0.17%4/1/2010 $5.82 993,300 -2.88%4/5/2010 $6.07 192,200 4.21%4/6/2010 $6.02 97,800 -0.83%4/7/2010 $6.18 106,800 2.62%4/8/2010 $6.39 164,800 3.34%4/9/2010 $6.27 96,000 -1.90%4/12/2010 $6.30 71,500 0.48%4/13/2010 $6.95 497,100 9.82%4/14/2010 $7.24 463,200 4.09%4/15/2010 $7.08 159,300 -2.23%4/16/2010 $6.77 252,200 -4.48%4/19/2010 $6.74 133,800 -0.44%4/20/2010 $6.55 85,168 -2.86%4/21/2010 $6.10 389,618 -7.12%4/22/2010 $6.03 139,202 -1.15%4/23/2010 $6.12 111,488 1.44%4/26/2010 $6.29 214,276 2.78%4/27/2010 $6.15 104,515 -2.25%4/28/2010 $6.15 94,224 0.00%4/29/2010 $6.20 184,692 0.81%4/30/2010 $6.21 70,376 0.16%5/3/2010 $6.16 88,360 -0.81%5/4/2010 $5.93 82,212 -3.81%5/5/2010 $5.80 107,152 -2.22%5/6/2010 $5.40 160,494 -7.15%5/7/2010 $5.22 207,028 -3.39%5/10/2010 $5.43 75,216 3.94%5/11/2010 $5.59 51,814 2.90%5/12/2010 $5.93 126,006 5.90%5/13/2010 $5.85 131,099 -1.36%5/14/2010 $5.80 44,855 -0.86%5/17/2010 $5.96 155,603 2.72%

Exhibit-3

SkyPeople Fruit Juice (SPU) Stock Price, Volume & Returns

March 30, 2010 through June 1, 2011


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



5/18/2010 $5.63 202,930 -5.70%5/19/2010 $5.56 110,375 -1.25%5/20/2010 $5.03 141,259 -10.02%5/21/2010 $5.27 102,043 4.66%5/24/2010 $5.41 82,637 2.62%5/25/2010 $5.12 122,753 -5.51%5/26/2010 $5.38 41,684 4.96%5/27/2010 $5.63 38,997 4.54%5/28/2010 $5.55 35,258 -1.43%6/1/2010 $5.37 81,094 -3.30%6/2/2010 $5.37 36,327 0.00%6/3/2010 $5.37 57,471 0.00%6/4/2010 $5.36 61,329 -0.19%6/7/2010 $5.37 58,933 0.19%6/8/2010 $5.61 83,583 4.37%6/9/2010 $5.58 61,635 -0.54%6/10/2010 $5.60 26,302 0.36%6/11/2010 $5.79 135,324 3.34%6/14/2010 $5.45 58,901 -6.05%6/15/2010 $5.43 43,796 -0.37%6/16/2010 $5.57 45,119 2.55%6/17/2010 $5.59 42,596 0.36%6/18/2010 $5.48 20,000 -1.99%6/21/2010 $5.62 46,798 2.52%6/22/2010 $5.39 51,854 -4.18%6/23/2010 $5.40 18,153 0.19%6/24/2010 $5.24 26,310 -3.01%6/25/2010 $5.16 49,501 -1.54%6/28/2010 $5.38 110,116 4.18%6/29/2010 $5.28 166,258 -1.88%6/30/2010 $5.05 140,832 -4.45%7/1/2010 $5.24 155,494 3.69%7/2/2010 $5.27 28,242 0.57%7/6/2010 $5.31 51,245 0.76%


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



7/7/2010 $5.22 18,546 -1.71%7/8/2010 $5.23 36,165 0.19%7/9/2010 $5.30 24,815 1.33%7/12/2010 $5.30 23,847 0.00%7/13/2010 $5.33 81,708 0.56%7/14/2010 $5.35 121,811 0.37%7/15/2010 $5.39 15,023 0.74%7/16/2010 $5.36 24,412 -0.56%7/19/2010 $5.51 34,753 2.76%7/20/2010 $5.52 13,056 0.18%7/21/2010 $5.42 29,684 -1.83%7/22/2010 $5.50 19,203 1.47%7/23/2010 $5.71 35,363 3.75%7/26/2010 $6.00 71,841 4.95%7/27/2010 $5.90 35,853 -1.68%7/28/2010 $5.89 49,070 -0.17%7/29/2010 $5.90 9,862 0.17%7/30/2010 $5.74 20,556 -2.75%8/2/2010 $5.71 60,674 -0.52%8/3/2010 $5.77 16,501 1.05%8/4/2010 $5.93 33,107 2.74%8/5/2010 $6.29 86,516 5.89%8/6/2010 $6.23 48,724 -0.96%8/9/2010 $6.52 142,460 4.55%8/10/2010 $6.20 136,864 -5.03%8/11/2010 $5.97 131,051 -3.78%8/12/2010 $5.92 30,942 -0.84%8/13/2010 $6.20 54,431 4.62%8/16/2010 $6.45 309,628 3.95%8/17/2010 $6.13 113,937 -5.09%8/18/2010 $6.12 32,176 -0.16%8/19/2010 $6.13 17,759 0.16%8/20/2010 $6.31 43,071 2.89%8/23/2010 $5.64 216,362 -11.23%


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



8/24/2010 $5.86 338,639 3.83%8/25/2010 $4.79 2,067,089 -20.16%8/26/2010 $4.69 324,038 -2.11%8/27/2010 $4.90 299,033 4.38%8/30/2010 $4.90 368,483 0.00%8/31/2010 $4.73 174,661 -3.53%9/1/2010 $4.79 347,598 1.26%9/2/2010 $4.70 125,109 -1.90%9/3/2010 $4.85 209,279 3.14%9/7/2010 $4.67 139,274 -3.78%9/8/2010 $4.61 122,049 -1.29%9/9/2010 $4.60 73,309 -0.22%9/10/2010 $4.50 113,939 -2.20%9/13/2010 $4.51 157,087 0.22%9/14/2010 $4.57 123,851 1.32%9/15/2010 $4.55 89,976 -0.44%9/16/2010 $4.38 62,255 -3.81%9/17/2010 $4.25 193,629 -3.01%9/20/2010 $4.21 137,888 -0.95%9/21/2010 $4.30 137,272 2.12%9/22/2010 $4.23 40,195 -1.64%9/23/2010 $4.39 75,801 3.71%9/24/2010 $4.42 41,095 0.68%9/27/2010 $4.36 65,284 -1.37%9/28/2010 $4.49 57,397 2.94%9/29/2010 $4.65 53,441 3.50%9/30/2010 $4.68 49,521 0.64%10/1/2010 $4.73 37,105 1.06%10/4/2010 $4.73 67,033 0.00%10/5/2010 $4.54 49,390 -4.10%10/6/2010 $4.50 65,720 -0.88%10/7/2010 $4.58 12,028 1.76%10/8/2010 $4.65 47,003 1.52%10/11/2010 $4.91 182,410 5.44%


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



10/12/2010 $4.93 79,512 0.41%10/13/2010 $4.97 154,535 0.81%10/14/2010 $4.94 51,109 -0.61%10/15/2010 $4.92 50,318 -0.41%10/18/2010 $5.69 789,667 14.54%10/19/2010 $5.76 347,328 1.22%10/20/2010 $5.88 89,141 2.06%10/21/2010 $5.72 167,865 -2.76%10/22/2010 $5.69 68,365 -0.53%10/25/2010 $5.72 148,621 0.53%10/26/2010 $5.82 255,145 1.73%10/27/2010 $5.85 175,774 0.51%10/28/2010 $5.76 36,302 -1.55%10/29/2010 $5.77 38,409 0.17%11/1/2010 $5.68 100,506 -1.65%11/2/2010 $5.69 92,310 0.25%11/3/2010 $5.70 105,826 0.18%11/4/2010 $5.71 95,095 0.18%11/5/2010 $5.64 65,819 -1.23%11/8/2010 $5.72 98,933 1.41%11/9/2010 $5.63 81,412 -1.59%11/10/2010 $5.62 74,126 -0.18%11/11/2010 $5.69 77,961 1.24%11/12/2010 $5.60 132,938 -1.59%11/15/2010 $5.62 90,051 0.36%11/16/2010 $5.24 316,077 -7.00%11/17/2010 $5.19 274,769 -0.96%11/18/2010 $5.13 127,255 -1.16%11/19/2010 $4.97 185,336 -3.17%11/22/2010 $4.78 150,011 -3.90%11/23/2010 $5.01 218,700 4.70%11/24/2010 $5.01 79,981 0.00%11/26/2010 $5.14 24,589 2.54%11/29/2010 $5.06 50,997 -1.55%


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



11/30/2010 $4.88 88,323 -3.62%12/1/2010 $5.03 60,966 3.03%12/2/2010 $4.87 92,219 -3.23%12/3/2010 $4.79 111,186 -1.66%12/6/2010 $4.80 122,778 0.21%12/7/2010 $4.80 119,371 0.00%12/8/2010 $4.70 164,696 -2.11%12/9/2010 $4.72 90,277 0.42%12/10/2010 $4.67 79,980 -1.06%12/13/2010 $4.55 155,030 -2.60%12/14/2010 $4.60 61,977 1.09%12/15/2010 $4.26 759,060 -7.68%12/16/2010 $4.08 357,312 -4.32%12/17/2010 $4.10 140,013 0.49%12/20/2010 $4.38 106,266 6.60%12/21/2010 $4.45 113,930 1.59%12/22/2010 $4.55 146,405 2.22%12/23/2010 $4.58 83,098 0.66%12/27/2010 $4.39 109,788 -4.24%12/28/2010 $4.50 54,089 2.47%12/29/2010 $4.54 46,516 0.88%12/30/2010 $4.62 57,398 1.75%12/31/2010 $4.65 27,389 0.65%1/3/2011 $4.53 139,259 -2.61%1/4/2011 $4.41 179,156 -2.68%1/5/2011 $4.34 207,233 -1.60%1/6/2011 $4.30 128,965 -0.93%1/7/2011 $4.33 35,953 0.70%1/10/2011 $4.53 66,593 4.52%1/11/2011 $4.70 220,171 3.68%1/12/2011 $4.85 123,352 3.14%1/13/2011 $4.90 116,405 1.03%1/14/2011 $4.94 123,928 0.81%1/18/2011 $4.92 103,696 -0.41%


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



1/19/2011 $4.76 73,659 -3.31%1/20/2011 $4.62 71,642 -2.99%1/21/2011 $4.83 190,561 4.45%1/24/2011 $4.87 72,620 0.82%1/25/2011 $4.84 44,859 -0.62%1/26/2011 $4.90 205,151 1.19%1/27/2011 $4.99 371,704 1.86%1/28/2011 $4.90 84,473 -1.82%1/31/2011 $5.16 280,346 5.17%2/1/2011 $5.00 387,183 -3.15%2/2/2011 $5.03 555,476 0.51%2/3/2011 $4.98 355,092 -0.91%2/4/2011 $4.93 131,571 -1.01%2/7/2011 $4.85 345,450 -1.64%2/8/2011 $4.82 190,682 -0.62%2/9/2011 $4.76 182,618 -1.25%2/10/2011 $4.79 100,174 0.63%2/11/2011 $4.68 111,024 -2.32%2/14/2011 $4.62 161,653 -1.29%2/15/2011 $4.64 62,418 0.43%2/16/2011 $4.70 107,433 1.28%2/17/2011 $4.79 75,654 1.90%2/18/2011 $4.76 51,801 -0.63%2/22/2011 $4.66 82,984 -2.12%2/23/2011 $4.60 77,423 -1.30%2/24/2011 $4.62 117,595 0.43%2/25/2011 $4.80 111,872 3.82%2/28/2011 $4.93 401,193 2.67%3/1/2011 $4.86 141,381 -1.43%3/2/2011 $4.74 109,707 -2.50%3/3/2011 $4.60 306,835 -3.00%3/4/2011 $4.59 142,791 -0.22%3/7/2011 $4.63 238,098 0.87%3/8/2011 $4.87 163,161 5.05%


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



3/9/2011 $4.75 119,071 -2.49%3/10/2011 $4.62 152,102 -2.77%3/11/2011 $4.51 189,586 -2.41%3/14/2011 $4.35 227,454 -3.61%3/15/2011 $4.18 216,804 -3.99%3/16/2011 $4.14 66,191 -0.96%3/17/2011 $4.22 36,878 1.91%3/18/2011 $4.37 73,704 3.49%3/21/2011 $4.35 108,047 -0.46%3/22/2011 $4.34 85,932 -0.23%3/23/2011 $4.38 112,448 0.92%3/24/2011 $4.32 146,718 -1.38%3/25/2011 $4.33 95,322 0.23%3/28/2011 $4.45 153,493 2.73%3/29/2011 $4.41 95,184 -0.90%3/30/2011 $4.23 173,354 -4.17%3/31/2011 $4.41 230,787 4.17%4/1/2011 $3.85 897,301 -13.58%4/4/2011 $3.57 670,684 -7.55%4/5/2011 $3.79 339,246 5.98%4/6/2011 $3.85 242,585 1.57%4/7/2011 $3.93 125,279 2.06%4/8/2011 $3.65 193,982 -7.39%4/11/2011 $3.56 167,847 -2.50%4/12/2011 $3.72 184,302 4.40%4/13/2011 $3.60 127,193 -3.28%4/14/2011 $3.66 184,685 1.65%4/15/2011 $3.88 531,841 5.84%4/18/2011 $3.80 192,204 -2.08%4/19/2011 $3.92 186,754 3.11%4/20/2011 $4.03 53,360 2.77%4/21/2011 $4.00 651,663 -0.75%4/25/2011 $3.87 78,449 -3.30%4/26/2011 $3.82 48,072 -1.43%


DateSPU Closing

PriceSPU Trading

Volume

SPULogarithmic

Return

Exhibit-3



4/27/2011 $3.70 122,416 -3.06%4/28/2011 $3.11 726,001 -17.53%4/29/2011 $3.20 317,980 3.01%5/2/2011 $3.25 147,993 1.40%5/3/2011 $3.23 183,485 -0.46%5/4/2011 $3.21 164,608 -0.62%5/5/2011 $3.14 110,283 -2.20%5/6/2011 $3.23 167,926 2.83%5/9/2011 $3.22 67,852 -0.31%5/10/2011 $3.29 109,506 2.00%5/11/2011 $3.37 181,268 2.55%5/12/2011 $3.62 105,793 7.16%5/13/2011 $3.43 89,803 -5.39%5/16/2011 $3.41 146,005 -0.58%5/17/2011 $3.60 149,361 5.42%5/18/2011 $3.62 138,853 0.55%5/19/2011 $3.67 169,564 1.24%5/20/2011 $3.51 89,350 -4.32%5/23/2011 $3.35 95,775 -4.67%5/24/2011 $3.26 170,998 -2.72%5/25/2011 $3.10 230,279 -5.03%5/26/2011 $2.98 263,792 -3.95%5/27/2011 $2.81 248,068 -5.87%5/31/2011 $2.55 599,681 -9.71%6/1/2011 $2.08 1,691,579 -20.37%

Source: CRSP


Exhibit-4Market Makers in SkyPeople (SPU) Common Stock

April 2010 to May 2011

Name Volume

KNIGHT EQUITY MARKETS, L.P. 5,381,137UBS SECURITIES LLC. 2,906,896WEDBUSH MORGAN SECURITIES INC. 1,772,130CITADEL SECURITIES LLC 1,626,324MORGAN STANLEY & CO., INCORPOR 1,564,961PERSHING TRADING COMPANY L.P. 1,385,477PENSON FINANCIAL SERVICES, INC. 1,296,770INTERACTIVE BROKERS LLC 1,114,053CITIGROUP GLOBAL MARKETS INC. 1,112,819MERRILL LYNCH 1,110,441AMERITRADE, INC. 904,030RODMAN AND RENSHAW LLC 867,934NATIONAL FINANCIAL SERVICES LL 841,530LIME BROKERAGE LLC 781,822SCOTTRADE, INC. 701,356GOLDMAN SACHS 673,015INSTINET CORPORATION 616,372BARCLAYS CAPITAL INC. 582,854CREDIT SUISSE FIRST BOSTON LLC 403,099CHARLES SCHWAB AND CO. INC. 344,703T.R. WINSTON & COMPANY, LLC 293,469ROTH CAPITAL PARTNERS, LLC 267,412MEYERS ASSOCIATES, L.P. 252,977J.P. MORGAN SECURITIES INC. 221,604E*TRADE CLEARING LLC 219,419WEDBUSH SECURITIES INC. 194,744HELFANT GROUP, INC. 135,277ELECTRONIC TRANSACTION CLEARING, INC. 126,428E*TRADE CAPITAL MKTS LLC 121,732DEUTSCHE BANK SECURITIES INC. 114,822RBC CAPITAL MARKETS 104,203ASSENT LLC 98,326ITG INC. 93,005FOLIOFN INVESTMENTS, INC. 89,744WEDBUSH SECURITIES INC. 85,868




Name Volume

ROSENBLATT SECURITIES INC. 82,237JEFFERIES & COMPANY, INC. 80,303OPPENHEIMER & CO. INC. 76,696SLOAN SECURITIES CORP 75,000CANTOR FITZGERALD & CO. 70,872M.S. HOWELLS & CO. 69,200TRIAD SECURITIES CORP 69,000SUSQUEHANNA CAPITAL GROUP 67,593SECURITIES INVESTMENT PLANNING 66,900FIRST CLEARING, LLC 63,590TRADEBOT SYSTEMS, INC. 63,197DAIN CORRESPONDENT SERVICES 62,226EBX LLC 59,000WEDBUSH SECURITIES INC. 57,398DART EXECUTIONS, LLC 53,588ALTERNET SECURITIES, INC. 51,695BRUT, LLC 48,745US CLEARING CORP DIV OF FLEET 46,894PACIFIC AMERICAN SECURITIES LL 44,800NOMURA SECURITIES INTERNATIONA 40,935MERRILL LYNCH PRO CLEARING COR 40,767O'CONNOR & COMPANY LLC 35,585VANGUARD BROKERAGE SERVICES 34,256FIMAT USA, INC. 34,115WELLS FARGO INVESTMENTS, LLC 31,211NORMANDY SECURITIES INC. 30,091PENSON FINANCIAL SERVICES, INC. 29,900MERLIN SECURITIES, LLC 26,900WEDBUSH SECURITIES INC. 26,679WEEDEN & CO.L.P. 25,564HARRIS NESBITT CORP. 23,770BANCA IMI SECURITIES CORP. 23,075SUBERT SECURITIES INC. 21,008JERICHO INVESTMENTS, LLC 20,449BNY BROKERAGE INC. 20,153




Name Volume

WOLVERINE EXECUTION SERVICES, 18,822MONNESS CRESPI HARDT AND CO. I 18,400HUDSON SECURITIES 16,500MKM PARTNERS 15,016ZACKS & COMPANY 14,134CIBC WORLD MARKETS INC. (CDS) 13,536SUCCESS TRADE 13,460OPTIONSXPRESS, INC. 13,135BREAN MURRAY AND CO. INC. 12,931NEONET SECURITIES, INC. 11,780TIMBER HILL LLC 11,521GRACE FINANCIAL GROUP LLC 11,300DOMESTIC SECURITIES, INC. 11,107PULSE TRADING INC. 11,000MAN SECURITIES INC. 10,565FOX RIVER EXECUTION TEHNOLOGY, LLC 10,039PINNACLE CAPITAL MARKETS, INC. 10,000TERRA NOVA TRADING 9,895NORTHPOINT TRADING PARTNERS, LLC 9,645BRIARCLIFF CAPITAL CORP. 9,077SOUTHWEST SECURITIES, INC. 8,800BAYPOINT TRADING LLC 7,800LINSCO/PRIVATE LEDGER CORP. 7,640WUNDERLICH SECURITIES INC. 6,604MOORS AND CABOT INC. 6,550NESBITT BURNS INC. 6,157TD SECURITIES INC. 5,950THINKORSWIM, INC. 5,650SANDERS MORRIS HARRIS INC. 5,596UBS FINANCIAL SERVICES INC. 5,300LABRANCHE FINANCIAL SERVICES, 5,271FIRST NEW YORK SECURITIES CO 5,000LEGEND SECURITIES, INC. 5,000PICTET OVERSEAS INC. 5,000RAYMOND JAMES AND ASSOCIATES I 4,820




Name Volume

INTERNATIONAL CORRESPONDENT TR 4,640ELECTRONIC BROKERAGE SYSTEMS, LLC 4,523BTIG, LLC 4,200THE GRISWOLD COMPANY, INCORPOR 4,100B. RILEY AND CO. INC. 4,000JONES AND ASSOCIATES INC. 3,900USAA INVESTMENT MANAGEMENT COM 3,595FIRST SOUTHWEST CO. 3,500BROWN BROTHERS HARRIMAN 3,400LADENBURG, THALMANN & CO. INC. 3,000TRACK DATA SECURITIES CORP. 2,982STIFEL NICOLAUS 2,931STATE STREET GLOBAL MARKETS, L 2,900STERNE AGEE AND LEACH INC. 2,700TRADESTATION SECURITIES, INC. 2,700NBCN CLEARING, INC./CDS 2,655BOENNING AND SCATTERGOOD INC. 2,600AMERICAN ENTERPRISE INVESTMENT 2,335LAMPOST CAPITAL LLC 2,330U.S. BANCORP INVESTMENTS, INC. 2,300YAMNER AND CO. INC. 2,300CUTTONE & CO., INC. 2,000CANACCORD CAPITAL (U.S.A.), IN 1,679COLLINS STEWART INC. 1,665JNK SECURITIES CORP. 1,608EDWARD D. JONES & CO., L.P. 1,600WILLIAM BLAIR & COMPANY L.L.C. 1,600J J B HILLIARD W L LYONS 1,500CHARDAN CAPITAL MARKETS LLC 1,300BIREMIS LLC 1,200STOCK USA INVESTMENTS 1,200SANFORD C. BERNSTEIN AND CO. I 1,100MILLENCO 1,000PAULSON INVESTMENT CO. INC. 875GFI SECURITIES LLC 800




Name Volume

ELECTRONIC BROKERAGE SYSTEMS I 691ROBERT W. BAIRD & CO. INCORPOR 620MAXIM GROUP, LLC 600SJ LEVINSON LLC 600GETCO EXECUTION SERVICES LLC. 519MAJOR LEAGUE SECURITIES INC. 500HSBC SECURITIES (USA) INC. 467GILFORD SECURITIES INC. 400KERSHNER SECURITIES, LLC 400SPARTAN SECURITIES GROUP LTD 300THE GAUSSIAN GROUP, LLC 250PRIMEVEST FINANCIAL SERVICES, 200LEK SECURITIES CORPORATION 100MB TRADING 99COWEN & CO., LLC 19

Source: Bloomberg LP


Exhibit-5

Market & Peer Index Levels & ReturnsMarch 30, 2010 through June 1, 2011

Date

CRSP Market Total Return Index Level [1]

CBOE China Index Level[2]

Market Index Logarithmic

Return

Peer Index Logarithmic

Return

3/30/2010 3,297.17 594.373/31/2010 3,287.80 585.85 -0.28% -1.44%4/1/2010 3,315.91 595.46 0.85% 1.63%4/5/2010 3,347.90 601.86 0.96% 1.07%4/6/2010 3,354.97 601.27 0.21% -0.10%4/7/2010 3,336.73 596.14 -0.55% -0.86%4/8/2010 3,346.46 600.84 0.29% 0.79%4/9/2010 3,368.90 607.58 0.67% 1.12%4/12/2010 3,375.25 602.57 0.19% -0.83%4/13/2010 3,377.76 600.89 0.07% -0.28%4/14/2010 3,419.79 609.71 1.24% 1.46%4/15/2010 3,420.22 610.56 0.01% 0.14%4/16/2010 3,365.00 591.46 -1.63% -3.18%4/19/2010 3,373.12 585.03 0.24% -1.09%4/20/2010 3,406.45 595.08 0.98% 1.70%4/21/2010 3,404.52 589.63 -0.06% -0.92%4/22/2010 3,416.91 593.42 0.36% 0.64%4/23/2010 3,442.50 597.30 0.75% 0.65%4/26/2010 3,431.20 596.37 -0.33% -0.16%4/27/2010 3,348.74 575.77 -2.43% -3.52%4/28/2010 3,366.43 575.94 0.53% 0.03%4/29/2010 3,412.72 584.97 1.37% 1.56%4/30/2010 3,354.36 581.74 -1.72% -0.55%5/3/2010 3,398.20 583.80 1.30% 0.35%5/4/2010 3,311.77 559.03 -2.58% -4.34%5/5/2010 3,281.32 552.09 -0.92% -1.25%5/6/2010 3,173.39 529.77 -3.34% -4.13%5/7/2010 3,121.91 527.70 -1.64% -0.39%5/10/2010 3,263.20 561.25 4.43% 6.16%5/11/2010 3,260.30 555.05 -0.09% -1.11%5/12/2010 3,313.96 567.52 1.63% 2.22%5/13/2010 3,277.64 562.49 -1.10% -0.89%5/14/2010 3,213.44 547.83 -1.98% -2.64%5/17/2010 3,211.87 539.05 -0.05% -1.62%5/18/2010 3,167.75 538.49 -1.38% -0.10%


Exhibit-5


Date




Return


Return

5/19/2010 3,145.23 528.92 -0.71% -1.79%5/20/2010 3,016.81 506.59 -4.17% -4.31%5/21/2010 3,063.20 524.65 1.53% 3.50%5/24/2010 3,025.68 522.81 -1.23% -0.35%5/25/2010 3,025.41 515.66 -0.01% -1.38%5/26/2010 3,016.59 514.29 -0.29% -0.27%5/27/2010 3,123.21 542.14 3.47% 5.27%5/28/2010 3,086.08 536.52 -1.20% -1.04%6/1/2010 3,028.16 524.97 -1.89% -2.18%6/2/2010 3,109.68 537.90 2.66% 2.43%6/3/2010 3,125.22 539.95 0.50% 0.38%6/4/2010 3,011.63 521.90 -3.70% -3.40%6/7/2010 2,968.53 511.45 -1.44% -2.02%6/8/2010 2,996.07 519.16 0.92% 1.50%6/9/2010 2,984.34 518.87 -0.39% -0.06%6/10/2010 3,073.57 538.35 2.95% 3.69%6/11/2010 3,092.77 541.84 0.62% 0.65%6/14/2010 3,092.65 542.32 0.00% 0.09%6/15/2010 3,167.16 557.40 2.38% 2.74%6/16/2010 3,163.33 557.11 -0.12% -0.05%6/17/2010 3,166.10 551.34 0.09% -1.04%6/18/2010 3,171.48 554.19 0.17% 0.52%6/21/2010 3,157.33 567.76 -0.45% 2.42%6/22/2010 3,105.66 556.45 -1.65% -2.01%6/23/2010 3,096.25 561.58 -0.30% 0.92%6/24/2010 3,045.15 551.57 -1.66% -1.80%6/25/2010 3,063.31 556.23 0.59% 0.84%6/28/2010 3,053.99 555.86 -0.30% -0.07%6/29/2010 2,952.24 531.37 -3.39% -4.51%6/30/2010 2,925.31 532.39 -0.92% 0.19%7/1/2010 2,913.74 536.15 -0.40% 0.70%7/2/2010 2,902.94 533.10 -0.37% -0.57%7/6/2010 2,912.50 532.72 0.33% -0.07%7/7/2010 3,003.87 543.47 3.09% 2.00%7/8/2010 3,033.13 540.84 0.97% -0.49%


Exhibit-5


Date




Return


Return

7/9/2010 3,060.44 548.85 0.90% 1.47%7/12/2010 3,056.66 544.73 -0.12% -0.75%7/13/2010 3,109.90 552.70 1.73% 1.45%7/14/2010 3,107.87 549.91 -0.07% -0.51%7/15/2010 3,109.27 548.74 0.04% -0.21%7/16/2010 3,019.48 536.23 -2.93% -2.31%7/19/2010 3,034.72 540.05 0.50% 0.71%7/20/2010 3,073.36 550.55 1.26% 1.93%7/21/2010 3,033.36 547.82 -1.31% -0.50%7/22/2010 3,105.46 564.01 2.35% 2.91%7/23/2010 3,135.84 568.86 0.97% 0.86%7/26/2010 3,172.92 572.89 1.18% 0.71%7/27/2010 3,164.98 570.00 -0.25% -0.51%7/28/2010 3,140.85 565.99 -0.77% -0.71%7/29/2010 3,132.26 563.81 -0.27% -0.39%7/30/2010 3,136.91 573.16 0.15% 1.64%8/2/2010 3,201.94 585.94 2.05% 2.21%8/3/2010 3,185.11 581.57 -0.53% -0.75%8/4/2010 3,209.37 589.20 0.76% 1.30%8/5/2010 3,201.25 591.07 -0.25% 0.32%8/6/2010 3,189.53 589.41 -0.37% -0.28%8/9/2010 3,208.53 593.25 0.59% 0.65%8/10/2010 3,182.61 582.43 -0.81% -1.84%8/11/2010 3,088.65 565.60 -3.00% -2.93%8/12/2010 3,073.77 565.81 -0.48% 0.04%8/13/2010 3,061.41 565.67 -0.40% -0.02%8/16/2010 3,065.52 568.83 0.13% 0.56%8/17/2010 3,108.84 573.29 1.40% 0.78%8/18/2010 3,116.28 571.17 0.24% -0.37%8/19/2010 3,063.26 572.10 -1.72% 0.16%8/20/2010 3,053.08 573.47 -0.33% 0.24%8/23/2010 3,038.17 566.33 -0.49% -1.25%8/24/2010 2,993.39 558.09 -1.48% -1.47%8/25/2010 3,007.40 557.00 0.47% -0.20%8/26/2010 2,986.95 554.63 -0.68% -0.43%


Exhibit-5


Date




Return


Return

8/27/2010 3,042.93 566.63 1.86% 2.14%8/30/2010 2,998.96 557.08 -1.46% -1.70%8/31/2010 2,999.11 560.95 0.00% 0.69%9/1/2010 3,087.62 574.88 2.91% 2.45%9/2/2010 3,117.67 577.66 0.97% 0.48%9/3/2010 3,158.96 583.59 1.32% 1.02%9/7/2010 3,120.83 573.51 -1.21% -1.74%9/8/2010 3,140.83 574.46 0.64% 0.17%9/9/2010 3,152.94 577.10 0.38% 0.46%9/10/2010 3,167.29 578.76 0.45% 0.29%9/13/2010 3,208.21 595.55 1.28% 2.86%9/14/2010 3,207.45 595.16 -0.02% -0.07%9/15/2010 3,217.20 595.68 0.30% 0.09%9/16/2010 3,214.88 597.32 -0.07% 0.27%9/17/2010 3,218.78 596.67 0.12% -0.11%9/20/2010 3,268.16 607.02 1.52% 1.72%9/21/2010 3,257.58 606.15 -0.32% -0.14%9/22/2010 3,240.76 605.58 -0.52% -0.09%9/23/2010 3,214.10 606.24 -0.83% 0.11%9/24/2010 3,283.20 620.64 2.13% 2.35%9/27/2010 3,268.17 620.67 -0.46% 0.00%9/28/2010 3,287.15 623.34 0.58% 0.43%9/29/2010 3,283.37 627.42 -0.11% 0.65%9/30/2010 3,276.61 624.76 -0.21% -0.42%10/1/2010 3,292.60 625.63 0.49% 0.14%10/4/2010 3,264.83 625.65 -0.85% 0.00%10/5/2010 3,332.59 639.50 2.05% 2.19%10/6/2010 3,331.14 632.86 -0.04% -1.04%10/7/2010 3,324.37 629.96 -0.20% -0.46%10/8/2010 3,349.67 634.07 0.76% 0.65%10/11/2010 3,351.49 643.54 0.05% 1.48%10/12/2010 3,364.31 641.81 0.38% -0.27%10/13/2010 3,393.69 650.91 0.87% 1.41%10/14/2010 3,380.69 649.19 -0.38% -0.26%10/15/2010 3,383.46 652.50 0.08% 0.51%


Exhibit-5


Date




Return


Return

10/18/2010 3,405.25 656.90 0.64% 0.67%10/19/2010 3,346.70 639.62 -1.73% -2.67%10/20/2010 3,384.50 650.26 1.12% 1.65%10/21/2010 3,385.94 653.75 0.04% 0.54%10/22/2010 3,395.03 656.01 0.27% 0.35%10/25/2010 3,407.44 673.44 0.37% 2.62%10/26/2010 3,406.09 674.27 -0.04% 0.12%10/27/2010 3,395.33 663.82 -0.32% -1.56%10/28/2010 3,398.87 662.34 0.10% -0.22%10/29/2010 3,404.33 664.87 0.16% 0.38%11/1/2010 3,404.71 673.17 0.01% 1.24%11/2/2010 3,435.58 680.03 0.90% 1.01%11/3/2010 3,447.51 683.76 0.35% 0.55%11/4/2010 3,516.29 689.42 1.98% 0.82%11/5/2010 3,530.86 690.64 0.41% 0.18%11/8/2010 3,527.59 702.29 -0.09% 1.67%11/9/2010 3,497.89 690.68 -0.85% -1.67%11/10/2010 3,516.97 693.74 0.54% 0.44%11/11/2010 3,504.23 696.51 -0.36% 0.40%11/12/2010 3,457.60 676.24 -1.34% -2.95%11/15/2010 3,453.40 672.69 -0.12% -0.53%11/16/2010 3,395.05 652.87 -1.70% -2.99%11/17/2010 3,400.49 657.67 0.16% 0.73%11/18/2010 3,453.48 668.34 1.55% 1.61%11/19/2010 3,466.75 662.70 0.38% -0.85%11/22/2010 3,465.70 664.65 -0.03% 0.29%11/23/2010 3,416.65 648.60 -1.43% -2.44%11/24/2010 3,470.87 663.17 1.57% 2.22%11/26/2010 3,447.49 656.16 -0.68% -1.06%11/29/2010 3,444.03 661.54 -0.10% 0.82%11/30/2010 3,423.66 646.31 -0.59% -2.33%12/1/2010 3,495.63 659.42 2.08% 2.01%12/2/2010 3,538.69 671.42 1.22% 1.80%12/3/2010 3,552.41 676.54 0.39% 0.76%12/6/2010 3,552.36 681.70 0.00% 0.76%


Exhibit-5


Date




Return


Return

12/7/2010 3,553.68 681.79 0.04% 0.01%12/8/2010 3,559.85 669.83 0.17% -1.77%12/9/2010 3,572.97 676.86 0.37% 1.04%12/10/2010 3,596.40 677.99 0.65% 0.17%12/13/2010 3,596.49 672.83 0.00% -0.76%12/14/2010 3,597.62 664.09 0.03% -1.31%12/15/2010 3,579.13 657.02 -0.52% -1.07%12/16/2010 3,600.50 651.47 0.60% -0.85%12/17/2010 3,606.11 651.22 0.16% -0.04%12/20/2010 3,612.75 651.07 0.18% -0.02%12/21/2010 3,638.81 665.52 0.72% 2.20%12/22/2010 3,650.43 666.86 0.32% 0.20%12/23/2010 3,646.08 661.09 -0.12% -0.87%12/27/2010 3,648.61 658.58 0.07% -0.38%12/28/2010 3,651.28 653.57 0.07% -0.76%12/29/2010 3,660.83 657.34 0.26% 0.58%12/30/2010 3,657.81 656.63 -0.08% -0.11%12/31/2010 3,656.36 658.30 -0.04% 0.25%1/3/2011 3,698.08 672.80 1.13% 2.18%1/4/2011 3,683.81 679.16 -0.39% 0.94%1/5/2011 3,704.45 682.01 0.56% 0.42%1/6/2011 3,695.52 680.46 -0.24% -0.23%1/7/2011 3,688.53 677.12 -0.19% -0.49%1/10/2011 3,685.92 681.14 -0.07% 0.59%1/11/2011 3,704.36 693.51 0.50% 1.80%1/12/2011 3,737.63 700.44 0.89% 0.99%1/13/2011 3,730.83 700.86 -0.18% 0.06%1/14/2011 3,756.32 698.83 0.68% -0.29%1/18/2011 3,764.35 705.91 0.21% 1.01%1/19/2011 3,717.42 701.00 -1.25% -0.70%1/20/2011 3,703.77 692.72 -0.37% -1.19%1/21/2011 3,708.86 690.78 0.14% -0.28%1/24/2011 3,732.61 696.11 0.64% 0.77%1/25/2011 3,731.14 690.78 -0.04% -0.77%1/26/2011 3,758.63 699.40 0.73% 1.24%


Exhibit-5


Date




Return


Return

1/27/2011 3,767.26 706.90 0.23% 1.07%1/28/2011 3,701.60 687.79 -1.76% -2.74%1/31/2011 3,730.04 702.91 0.77% 2.17%2/1/2011 3,794.13 720.02 1.70% 2.41%2/2/2011 3,785.74 721.55 -0.22% 0.21%2/3/2011 3,797.00 720.05 0.30% -0.21%2/4/2011 3,805.62 722.75 0.23% 0.37%2/7/2011 3,829.50 721.05 0.63% -0.24%2/8/2011 3,847.14 725.93 0.46% 0.67%2/9/2011 3,834.30 715.84 -0.33% -1.40%2/10/2011 3,839.98 725.83 0.15% 1.39%2/11/2011 3,863.71 735.33 0.62% 1.30%2/14/2011 3,876.94 734.95 0.34% -0.05%2/15/2011 3,864.26 730.74 -0.33% -0.57%2/16/2011 3,893.60 735.10 0.76% 0.59%2/17/2011 3,908.89 738.00 0.39% 0.39%2/18/2011 3,913.39 738.41 0.12% 0.06%2/22/2011 3,830.22 705.66 -2.15% -4.54%2/23/2011 3,804.28 697.81 -0.68% -1.12%2/24/2011 3,804.08 707.03 -0.01% 1.31%2/25/2011 3,853.50 718.41 1.29% 1.60%2/28/2011 3,874.06 722.87 0.53% 0.62%3/1/2011 3,815.19 715.13 -1.53% -1.08%3/2/2011 3,825.86 715.46 0.28% 0.05%3/3/2011 3,888.43 725.09 1.62% 1.34%3/4/2011 3,864.76 725.32 -0.61% 0.03%3/7/2011 3,827.92 715.80 -0.96% -1.32%3/8/2011 3,859.26 728.74 0.82% 1.79%3/9/2011 3,849.52 731.54 -0.25% 0.38%3/10/2011 3,772.93 721.86 -2.01% -1.33%3/11/2011 3,799.58 727.89 0.70% 0.83%3/14/2011 3,778.35 725.41 -0.56% -0.34%3/15/2011 3,736.45 715.59 -1.11% -1.36%3/16/2011 3,673.66 695.46 -1.69% -2.85%3/17/2011 3,718.72 696.35 1.22% 0.13%


Exhibit-5


Date




Return


Return

3/18/2011 3,736.52 688.95 0.48% -1.07%3/21/2011 3,798.46 709.29 1.64% 2.91%3/22/2011 3,785.80 710.39 -0.33% 0.15%3/23/2011 3,796.42 720.04 0.28% 1.35%3/24/2011 3,829.37 727.79 0.86% 1.07%3/25/2011 3,841.75 730.12 0.32% 0.32%3/28/2011 3,828.93 728.79 -0.33% -0.18%3/29/2011 3,856.73 740.60 0.72% 1.61%3/30/2011 3,888.50 746.45 0.82% 0.79%3/31/2011 3,885.61 754.51 -0.07% 1.07%4/1/2011 3,906.83 766.24 0.54% 1.54%4/4/2011 3,911.04 780.25 0.11% 1.81%4/5/2011 3,916.24 778.69 0.13% -0.20%4/6/2011 3,922.89 774.83 0.17% -0.50%4/7/2011 3,913.97 779.51 -0.23% 0.60%4/8/2011 3,899.87 782.98 -0.36% 0.44%4/11/2011 3,881.66 779.35 -0.47% -0.46%4/12/2011 3,845.74 764.32 -0.93% -1.95%4/13/2011 3,850.50 777.95 0.12% 1.77%4/14/2011 3,851.95 780.94 0.04% 0.38%4/15/2011 3,867.21 783.16 0.40% 0.28%4/18/2011 3,822.09 783.81 -1.17% 0.08%4/19/2011 3,843.98 795.21 0.57% 1.44%4/20/2011 3,898.87 798.91 1.42% 0.46%4/21/2011 3,921.84 802.17 0.59% 0.41%4/25/2011 3,914.55 805.69 -0.19% 0.44%4/26/2011 3,947.11 798.19 0.83% -0.94%4/27/2011 3,971.34 794.92 0.61% -0.41%4/28/2011 3,983.29 794.24 0.30% -0.09%4/29/2011 3,995.54 799.69 0.31% 0.68%5/2/2011 3,981.66 798.87 -0.35% -0.10%5/3/2011 3,955.69 775.05 -0.65% -3.03%5/4/2011 3,924.57 764.23 -0.79% -1.41%5/5/2011 3,888.22 764.39 -0.93% 0.02%5/6/2011 3,905.97 774.61 0.46% 1.33%


Exhibit-5


Date




Return


Return

5/9/2011 3,929.76 783.77 0.61% 1.18%5/10/2011 3,963.31 784.29 0.85% 0.07%5/11/2011 3,915.12 770.78 -1.22% -1.74%5/12/2011 3,931.29 763.60 0.41% -0.94%5/13/2011 3,896.26 749.60 -0.90% -1.85%5/16/2011 3,868.65 738.56 -0.71% -1.48%5/17/2011 3,866.06 737.53 -0.07% -0.14%5/18/2011 3,907.89 743.62 1.08% 0.82%5/19/2011 3,917.44 747.86 0.24% 0.57%5/20/2011 3,890.40 735.27 -0.69% -1.70%5/23/2011 3,839.60 710.34 -1.31% -3.45%5/24/2011 3,837.31 714.15 -0.06% 0.53%5/25/2011 3,856.94 718.10 0.51% 0.55%5/26/2011 3,877.45 721.53 0.53% 0.48%5/27/2011 3,897.10 733.23 0.51% 1.61%5/31/2011 3,937.26 746.30 1.03% 1.77%6/1/2011 3,845.06 732.86 -2.37% -1.82%

Sources:[1] CRSP[2] Capital IQ


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EXHIBIT 2


DECLARATION OF ZACHARY LEWY

I, Zachary Lewy, declare, under penalty of perjury as follows:

1. I submit this declaration in support of my motion for Class

Certification and for my appointment as one of the Class Representatives.

2. I have read the initial complaint, and read and authorized the filing of

the Consolidated Amended Complaint (the "Complaint") that was filed against

defendants SkyPeople Fruit Juice, Inc., ("SkyPeople"), Yongke Xue, Hongke

Xue, Xiaoqin Yan, Spring Liu, Norman Ko, Guolin Wang, (together with

SkyPeople, the " SkyPeople Defendants"), bankrupt defendant Rodman &

Renshaw, LLC ("Rodman") and former defendants BDO Limited, and Child, Van

Wagoner & Bradshaw, PLLC. I believe the action to be meritorious.

3. I am aware that I am the Lead Plaintiff in this case.

4. I am aware that the Complaint alleges, among other things, that the

SkyPeople Defendants violated Sections 10(b) and 20(a) of the Securities and

Exchange Act of 1934 (the "Exchange Act") by making materially false and

misleading statements. Among other things, the Complaint charges that

SkyPeople's revenues in 2009 were about $3,859,000, but that the SkyPeople

Defendants represented to U.S. investors that SkyPeople had earned $59,250,000

that year.

5. I am aware that a class action lawsuit, like this one, is brought on

behalf of not only myself but other shareholders that have been wronged in the

same way by Defendants.

6. I understand that I am seeking to represent a class of all persons who

bought or acquired SkyPeople common stock between March 31, 2010, and June

1, 2011.


7. I understand that in September 2012, the Court denied in part the

SkyPeople Defendants' motions to dismiss the claims I assert. Thus, the case has

moved into discovery.

8. I have communicated with counsel throughout the course of this

action. I have responded to discovery. My deposition is scheduled to take place on

July 12,2013.

9. I understand that a class representative is a representative party who

acts on behalf of other class members in directing the litigation. I am willing to

serve as a class representative either individually or as part of a group.

10. I understand that as a class representative, I have a fiduciary

responsibility to the absent class members to oversee the litigation and ensure that

counsel for plaintiffs prosecute the case vigorously and in the interest of all class

members equally.

11. I understand that the other proposed class representatives are

Benjamin Padnos and Eric Klement.

12. I will continue to communicate with the Rosen Law Firm about the

status of the litigation, case strategies, settlement negotiations, and other matters

pertinent to overseeing the litigation.

13. Throughout the course of this litigation, I have independently

monitored news about SkyPeople through internet financial sites. Even prior to

my involvement in this action, I monitored SkyPeople news releases and its stock

price. I will continue independently to monitor SkyPeople developments through

news and internet sources, independent of any information that I may receive or

demand from counsel.

14. I understand that, as a class representative, my duties may include

consulting with plaintiffs' counsel on proposed strategies and tactics during the

course of the litigation, making recommendations as to whether or not to accept a


particular settlement offer, and testifying at deposition and trial. I accept and will

diligently perform all such duties.

I declare under penalty of perjury under the laws of the United States of

America that the foregoing is true and correct.

Executed this~iday of June, 2013


EXHIBIT 3


EXHIBIT 4


DECLARATION OF BENJAMIN PADNOS

I, Benjamin Padnos, declare, under penalty of perjury as follows:

1. I submit this declaration in support of my motion for Class

Certification and for my appointment as one of the Class Representatives.

2. I have read the initial complaint, and read and authorized the filing of

the Consolidated Amended Complaint (the “Complaint”) that was filed against

defendants SkyPeople Fruit Juice, Inc., (“SkyPeople”), Yongke Xue, Hongke

Xue, Xiaoqin Yan, Spring Liu, Norman Ko, Guolin Wang, (together with

SkyPeople, the “Defendants”), bankrupt defendant Rodman & Renshaw, LLC

(“Rodman”) and former defendants BDO Limited, and Child, Van Wagoner &

Bradshaw, PLLC. I believe the action to be meritorious. I have also participated

in discovery and have had my deposition taken by Defendants.

3. I am aware that the Complaint alleges, among other things, that

Defendants violated Sections 11 and 15 of the Securities Act of 1933 (the

“Securities Act”) by making false statements in a registration statement (the

“Registration Statement”) for an offering in which I bought shares on August 30,

2010. The Complaint alleges that the SkyPeople Defendants omitted to disclose a

related party transaction whose omission made SkyPeople’s financial statements

false and misleading. The related party transaction at issue in the Complaint is

SkyPeople’s acquisition of Yingkou Trusty Fruits Co., Ltd. (“Yingkou”) for about

$3.3 million in a transaction that closed in November 2009. The Registration

Statement incorporated SkyPeople’s 2008 and 2009 financial statements, and the

Complaint alleges that SkyPeople’s 2008 financial statement overstated its

revenues by at least 290%, and that for fiscal year 2009, SkyPeople overstated its

revenues by over 1,000%.


4. I am aware that a class action lawsuit, like this one, is brought on

behalf of not only myself but other shareholders that have been wronged in the

same way by Defendants.

5. I understand that I represent a class of all persons who bought shares

pursuant or traceable to the Registration Statement.

6. I understand that in September 2012, the Court denied Defendants’

motions to dismiss. Thus, the case has moved into discovery.

7. I have communicated with counsel throughout the course of this

action.

8. I understand that a class representative is a representative party who

acts on behalf of other class members in directing the litigation. I am willing to

serve as a class representative either individually or as part of a group.

9. I understand that as a class representative, I have a fiduciary

responsibility to the absent class members to oversee the litigation and ensure that

counsel for plaintiffs prosecute the case vigorously and in the interest of all class

members equally.

10. I understand that the other proposed class representatives are Zachary

Lewy and Eric Klement.

11. I will continue to communicate with Federman & Sherwood and the

Rosen Law Firm about the status of the litigation, case strategies, settlement

negotiations, and other matters pertinent to overseeing the litigation.

12. Throughout the course of this litigation, I have independently

monitored news about SkyPeople through internet financial sites. Even prior to

my involvement in this action, I monitored SkyPeople news releases and its stock

price. I will continue to monitor independently SkyPeople developments through

news and internet sources, independent of any information that I may receive or

demand from counsel.


13. I understand that, as a class representative, my duties may include

consulting with plaintiffs’ counsel on proposed strategies and tactics during the

course of the litigation, making recommendations as to whether or not to accept a

particular settlement offer, and testifying at deposition and trial. I accept and will

diligently perform all such duties. I have already testified at a deposition in the

beginning of June 2013

I declare under penalty of perjury under the laws of the United States of

America that the foregoing is true and correct.

Executed this ___ day of June, 2013

BENJAMIN PADNOS

328


EXHIBIT 5


Case 1:11-cv-02700-PKC Document 15-2 Filed 06/20/11 Page 2 of 9Case 1:11-cv-02700-PKC Document 118-1 Filed 06/28/13 of 111

Case 1:11-cv-02700-PKC Document 15-2 Filed 06/20/11 Page � of 9Case 1:11-cv-02700-PKC Document 118-1 Filed 06/28/13 of 111

EXHIBIT 6


ROSEN LAW FIRM BIOGRAPHY 1

THE ROSEN LAW FIRM P.A.BIOGRAPHY

I. ATTORNEYS

LAURENCE ROSEN - MANAGING ATTORNEY

Laurence Rosen is a 1988 graduate of New York University School of Law. He earned

an M.B.A. in finance and accounting at the University of Chicago Graduate School of Business

and a B.A. in Economics from Emory University. Mr. Rosen served as a law clerk to the

Honorable Stanley S. Brotman, Senior United States District Judge for the District of New

Jersey. Mr. Rosen entered private practice as an associate at the law firm of Skadden Arps Slate

Meagher & Flom in New York City where he participated in a number of complex securities

class action and derivative litigation matters. He later served as an associate at McCarter &

English in Newark, New Jersey where he specialized in securities and business litigation.

After practicing general securities and commercial litigation in New York City with

Solton Rosen & Balakhovsky LLP, Mr. Rosen founded The Rosen Law Firm to represent

investors exclusively in securities class actions and derivative litigation. Mr. Rosen is admitted

to practice law in New York, California, Florida, New Jersey and the District of Columbia. Mr.

Rosen is also admitted to practice before numerous United States District Courts throughout the

country and the United States Court of Appeals for the Second, Fourth, and Sixth Circuits.

PHILLIP KIM – ATTORNEY

Mr. Kim graduated from Villanova University School of Law in 2002. He received a

B.A. in Economics from The Johns Hopkins University in Baltimore, Maryland in 1999. Prior to

joining The Rosen Law Firm, Mr. Kim served as Assistant Corporation Counsel for the City of

New York in the Special Federal Litigation Division. In that position, Mr. Kim defended a



number of class action lawsuits, litigated numerous individual actions, and participated in more

than seven trials. Mr. Kim focuses his practice on securities class actions and shareholder

derivative litigation. Mr. Kim is admitted to the bar of the State of New York and admitted to

practice in the United States District Courts for the Southern District of New York, the Eastern

District of New York and the District of Colorado, and the United States Court of Appeals for

the Second Circuit.

TIMOTHY W. BROWN – ATTORNEY

In 2004 Mr. Brown graduated from the University of Chicago School of Law at which he

was a recipient of a merit scholarship. Mr. Brown received his B.A. in Business Economics,

magna cum laude, from Brown University in 2001. Mr. Brown specializes in securities class

actions and shareholder derivative litigation. Mr. Brown is admitted to the bar of the State of

New York and admitted to practice in the United States District Court for the Southern District

of New York. Mr. Brown was previously employed by UBS, AG.

SARA FUKS – ATTORNEY

Ms. Fuks graduated from Fordham University School of Law, cum laude, in February

2005, where she was a member of Fordham Law Review. She received her B.A. in Political

Science, magna cum laude, from New York University in 2001. Ms. Fuks began her practice at

Dewey Ballantine, LLP where she focused on general commercial litigation and then went on to

prosecute numerous ERISA and securities class actions as an associate at Milberg LLP. Ms.

Fuks is admitted to the bar of the State of New York and admitted to practice in the United States

Southern and Eastern District Courts of New York.



JONATHAN HORNE- ATTORNEY

Mr. Horne is a 2009 graduate of New York University School of Law, where he received

the Lederman/Milbank Law, Economics, and Business fellowship, and holds a B.A. in

Economics & Philosophy from the University of Toronto. Mr. Horne began his practice at Kaye

Scholer Fierman Hays & Handler LLP, where he participated in two federal trials. Mr. Horne

specializes in securities litigation. He is admitted to practice in New York and numerous federal

district courts.

YU SHI – ATTORNEY

Mr. Shi received his J.D. from Columbia University School of Law in 2011 and his B.A.,

cum laude, from Columbia University in 2008. Prior to joining The Rosen Law Firm, Mr. Shi

served as a Special Assistant Corporation Counsel in the New York City Law Department’s

Economic Development Division, where he worked on business and commercial transactions

involving the City of New York. Mr. Shi specializes in securities litigation. He is admitted to

practice in the State of New York and the United States District Court for the Southern District

of New York.

KEVIN CHAN

Mr. Chan graduated from Brooklyn Law School in 2012. He received an A.B. in

Psychology from Harvard University in 2007. Prior to joining the Rosen Law Firm, Mr. Chan

gained substantive experience as an intern with the U.S. Securities and Exchange Commission as

part of its Summer Honors Law Program. Mr. Chan’s admission to practice in New York is

currently pending.



CHRISTOPHER S. HINTON – OF COUNSEL

Mr. Hinton is admitted to the bars of the State of New York, the United States District

Court for the Southern District of New York, United States District Court for the Eastern District

of Wisconsin, and the United States District Court for the District of Nebraska. He received a

B.A. degree in Economics and Political Science in 1997, magna cum laude, from Marquette

University, where he was elected to Phi Beta Kappa, and received a J.D. degree, cum laude, from

University of Illinois College of Law at Champaign in 2002. His primary area of practice is

securities and ERISA class action litigation. He co-authored Foreign Investors Serving as Lead

Plaintiffs in U.S.- Based Securities Cases, International Practice Section Newsletter (Association

of Trial Lawyers of America, Washington, D.C.), Winter 2004 and Spring 2005. Mr. Hinton has

been a member of the plaintiffs’ bar since 2003 and has focused on class action litigation.

II. RECENT ACCOMPLISHMENTS OF THE ROSEN LAW FIRM PA

In re Textainer Financial Servs. Corp., No. CGC 05-440303. The Rosen Law Firm was

Co-Lead Counsel in this class action in the California Superior Court, San Francisco County

alleging breach of fiduciary duty in connection with the sale of the assets of six related publicly

traded limited partnerships. After winning the first phase of a multi-phase bench trial, Plaintiffs

obtained a $10 million cash settlement for class members.

Friedman v. Quest Energy Partners LP, et al., Case No. CIV-08-936-M. The Rosen Law

Firm was sole Lead Counsel on behalf of purchasers of Quest Resource Corporation’s securities

in this consolidated class action filed in the U.S. District Court for the Western District of

Oklahoma. The complaint alleged violations of §§10b and 20(a) of the Securities Exchange Act

arising out of the Company’s issuance of materially false and misleading statements in



connection with the Company’s former CEO and CFO misappropriating nearly $10 million. All

classes and parties to this litigation settled this action for $10.1 million in cash.

Hufnagle v. RINO International Corporation, No. CV 10-8695-VBF (VBKx). The Rosen

Law Firm is currently serving as sole Lead Counsel in this consolidated class action pending in

the U.S. District Court for the Central District of California. The complaint alleges violations of

§§10b and 20(a) of the Securities Exchange Act arising out of the Company’s issuance of

materially false and misleading statements of revenue and earnings. The parties agreed to a

partial settlement for $7 million in cash. The case is ongoing against RINO’s auditor.

In re Nature’s Sunshine Products, Inc. Securities Litigation, Case No. 2:06-cv-00267-TS-

SA. The Rosen Law Firm was sole Lead Class Counsel in this class action in the U.S. District

Court for the District of Utah. The complaint alleged violations of §§ 10b and 20(a) of the

Securities Exchange Act arising out of the Company’s materially false and misleading statements

concerning its financial statements and business practices. Following the certification of the

class and extensive discovery, Plaintiffs agreed to settle this case for $6 million in cash.

Bensley v. FalconStor Software, Inc., No. 10-CV-4672 (ERK) (CLP). The Rosen Law

Firm is currently serving as sole Lead Counsel in this consolidated class action pending in the

U.S. District Court for the Eastern District of New York. The complaint alleges violations of


materially false and misleading statements about the Company’s true financial and business

condition. The parties have preliminarily agreed to settle this action for $5 million in cash,

subject to Court approval.

In re Entropin, Inc. Securities Litigation, Case No. CV 04-6180-RC. The Rosen Law

Firm was counsel to Plaintiff in this securities class action in the United States District Court for

the Central District of California, and Lead Counsel in the related class action brought in



California state court against Entropin, Inc., a defunct pharmaceutical company. These actions

alleged violations of §§ 10b and 20(a) of the Securities Exchange Act and violations various

state securities laws arising out of allegedly false and misleading statements about the

Company’s lead drug candidate Esterom, respectively. On the eve of trial, Defendants agreed to

settle these cases for a $4.5 million cash payment to class members.

Stanger v. China Electric Motor, Inc., Case no. CV 11-2794-R (AGRx). The Rosen Law

Firm is currently serving as sole Lead Counsel in this class action pending in the U.S. District

Court for the Central District of California. The complaint alleges violations of §§ 11, 12(a)(2),

and 15 of the Securities Act of 1933 in connection with the Company’s $22.5 million initial

public offering. The parties have preliminarily agreed to settle this action for $3,778,333.33 in

cash, subject to Court approval.

In re StockerYale, Inc. Securities Litigation, Case No. 1:05-cv-00177. The Rosen Law

Firm served as sole Lead Counsel in this consolidated class action in the U.S. District Court for

the District of New Hampshire. The complaint alleged violations of §§ 10b, 20(a) and 20A of

the Securities Exchange Act arising out of the issuance of allegedly false and misleading press

releases regarding certain contracts the Company claimed to have signed. Plaintiffs settled this

class action for $3.4 million cash payment to class members.

Mallozzi v. Industrial Enterprises of America, Inc., Case No. 07-CV-10321 (GBD). The

Rosen Law Firm was Co-Lead Counsel in this class action in the U.S. District Court for the

Southern District of New York. The complaint alleged violations of §§ 10b and 20(a) of the

Securities Exchange Act arising out of the Company’s issuance of materially false and

misleading statements of revenues and earnings. During the pendency of the Company’s

bankruptcy, the parties settled this class action for $3.4 million in cash.



Meruelo Capital Partners 2, LLC et al. v. Wedbush Morgan Securities, Inc., Case no. BC

352498. The Rosen Law Firm was co-counsel to plaintiffs in this action brought in California

Superior Court, Los Angeles County for violations of the California State securities laws against

the securities issuer and broker-dealer in connection with the sale of $2.5 million worth of

securities. On the eve of trial, plaintiffs settled the claims against the issuer for a cash payment

of $1 million. Following an eight day jury trial, Plaintiffs obtained a jury verdict in their favor

and against the underwriter for over $2.2 million (which included prejudgment interest). In sum,

plaintiffs recovered over $3.2 million, which represented 100% of plaintiffs’ principal

investment of $2.5 million and over $700,000 in prejudgment interest. The verdict was affirmed

by the California 2nd District Court of Appeal.

Ray v. TierOne Corporation, Case No. 10CV199. The Rosen Law Firm was sole Lead

Counsel in this class action brought in the U.S. District Court for the District of Nebraska. The

complaint alleged violations of §§10b and 20(a) of the Securities Exchange Act arising out of the

Company’s issuance of materially false and misleading statements of earnings and the

Company’s banking operations and business. The parties settled this action for $3.1 million in

cash.

In re Skilled Healthcare Group, Inc. Securities Litigation, Case No. 2:09-CV-5416-DOC

(RZx). The Rosen Law Firm was Co-Lead Counsel in this class action in the U.S. District Court

for the Central District of California. The complaint alleged violations of the §§ 11, 12(a)(2),

and 15 of the Securities Act of 1933 and §§10b and 20(a) of the Securities Exchange Act arising

out of the Company’s issuance of materially false and misleading statements of revenue and

earnings. Plaintiffs settled this action for $3 million in cash.

Madden v. Pegasus Communications Corp, Case No. 2:05-cv-0568. The Rosen Law

Firm was sole Lead Counsel in this class action in the U.S. District Court for the Eastern District



of Pennsylvania. The action alleged violations of §§ 10b and 20(a) of the Securities Exchange

Act arising out of the issuance of allegedly false and misleading statements concerning the

Company’s direct broadcast satellite agreement with DirecTV and the Company’s reported

subscriber growth and totals. Plaintiffs settled this action for a $2.95 million cash payment to

class members.

In re TVIA, Inc. Securities Litigation, Case No. C-06-06403-RMW. The Rosen Law

Firm was sole Lead Counsel in this consolidated class action in the U.S. District Court for the

Northern District of California. The complaint alleged violations of §§ 10b, 20(a), 20A of the

Securities Exchange Act arising out of the Company’s issuance of materially false and

misleading financial statements by virtue of the Company improper recognition of revenues in

violation of GAAP. Plaintiffs settled this action for a $2.85 million cash payment to class

members.

Zagami v. Natural Health Trends Corp., et al., Case No. 3:06-CV-1654-D. The Rosen

Law Firm served as sole Lead Counsel in this class action in the U.S. District Court for the

Northern District of Texas. The complaint alleged violations of § 10b and 20(a) of the Securities

Exchange Act arising out of the Company’s issuance of materially false and misleading financial

statements in violation of GAAP. Plaintiffs settled this case for $2.75 million cash payment to

class members.

In re Robert T. Harvey Securities Litigation, Case No. SA CV-04-0876 DOC (PJWx).

The Rosen Law Firm served as Co-Lead Counsel in this class action in the U.S. District Court

for the Central District of California and the related California state court class actions. This

action alleged violations of §§ 10b and 20(a) of the Securities Exchange Act arising out of the

sale of partnership interests that corresponded to the securities of Chaparral Network Storage and



AirPrime, Inc., n/.k/a Sierra Wireless, Inc. Plaintiffs settled this and the related state court

actions for an aggregate $2.485 million cash payment to class members.

In re China Education Alliance, Inc. Securities Litigation, No. C 10-9239-CAS (JCx).

The Rosen Law Firm is currently serving as sole Lead Counsel in this consolidated class action

pending in the U.S. District Court for the Central District of California. The complaint alleges

violations of §§10b and 20(a) of the Exchange Act arising out of the Company’s issuance of

materially false and misleading statements of revenue and earnings. The parties settled this

action for $2.425 million in cash.

In re Fuwei Films Securities Litigation, Case no. 07-CV-9416 (RJS). The Rosen Law

Firm was sole Lead Counsel in this consolidated class action in the U.S. District Court for the

Southern District of New York. The complaint alleged violations of §§ 11, 12(a)(2), and 15 of

the Securities Act of 1933 in connection with material misrepresentations in the Company’s

Registration Statement and Prospectus in connection with the Company’s $35 million IPO. The

parties settled this action for $2.15 million cash payment to class members.

Rose v. Deer Consumer Products, Inc., Case No. CV11-3701 –DMG (MRWx). The

Rosen Law Firm is currently serving as sole Lead Counsel in this class action pending in the

U.S. District Court of the Central District of California. The complaint alleges violations of

§§10b and 20(a) of the Securities Exchange Act arising the issuance of false statements

concerning the Company’s true financial condition. The parties agreed to a partial settlement for

$2.125 million in cash. The case is ongoing against Deer’s auditor.

Henning v. Orient Paper, Inc., No. CV 10-5887-VBF (AJWx). The Rosen Law Firm is

currently serving as sole Lead Counsel in this class action pending in the U.S. District Court for

the Central District of California. The complaint alleges violations of §§10b and 20(a) of the

Securities Exchange Act and certain violations of the Securities Act arising out of the



Company’s issuance of materially false and misleading statements about the Company’s true

financial condition and business prospects. The parties settled this action for $2 million in cash.

Burritt v. Nutracea, Inc., Case No.CV-09-00406-PHX-FJM. The Rosen Law Firm was

sole Lead Counsel in this consolidated class action in the U.S. District Court for the District of

Arizona. This action alleged violations of §§ 10b and 20(a) of the Securities Exchange Act of

1934 and the Arizona securities laws in connection with the Company’s issuance of materially

false and misleading statements of earnings and revenues. During the pendency of the

Company’s bankruptcy, Plaintiffs settled this action for $1.5 million in cash and a remainder

interest of 50% of the issuer’s directors’ and officers’ liability insurance policy.

Press v. Delstaff LLC, No. MSC 09-01051. The Rosen Law Firm was sole Lead Counsel

in this class action in the California Superior Court for Contra Costa County, brought in

connection with a “going private” transaction valued at $1.25/share for the 6.4 million shares

implicated in the transaction. The parties settled this action for $1,642,500 in additional

compensation to shareholders.

In re Northfield Laboratories, Inc. Securities Litigation, Case No. 06 C 1493. The Rosen

Law Firm was sole Lead Counsel in this consolidated class action in the U.S. District Court for

the Northern District of Illinois. The complaint alleged violations of §§ 10b and 20(a) of the

Securities Exchange Act arising out of the Company’s materially false and misleading statements

concerning its PolyHeme blood substitute product and business prospects. Following extensive

class discovery and litigation activity in bankruptcy court, the parties agreed to settle this action

for $1.5 million in cash.

In re PartsBase.com, Inc. Securities Litigation, Case No. 01-8319. The Rosen Law Firm

was Co-Lead Counsel in this class action in the U.S. District Court for the Southern District of

Florida. The action arose from a $45.5 million initial public offering of common stock by the



defendant issuer and a syndicate of underwriters including Roth Capital Partners and PMG

Capital Corp. Plaintiffs settled this action for $1.5 million cash settlement for class members.

In re Empyrean Bioscience Securities Litigation, Case No. 1:02CV1439. This class

action in which the Rosen Law Firm was sole Lead Counsel was filed in the U.S. District Court

for the Northern District of Ohio. The action alleged violations of §§10b and 20(a) of the

Securities Exchange Act based on misrepresentations in defendants’ SEC filings and press

releases concerning the clinical testing of the Company’s GEDA Plus microbicide gel. After the

court denied defendants’ motion to dismiss the complaint, the parties briefed the issue of whether

the securities were traded in an efficient market. Prior to a decision on market efficiency,

Plaintiffs settled the case for a $1.4 million payment to class members.

In re Himax Technologies, Inc. Securities Litigation, Case No. C 07-4891-DDP. The

Rosen Law Firm served as Co-Lead Counsel in this consolidated class action in the U.S. District

Court for the Central District of California, Western Division. The complaint alleged violations

of §§ 11 and 15 of the Securities Act arising out of the Company’s IPO. Plaintiffs agreed to

settle this case for $1.2 million cash payment to class members.

In re Flight Safety Technologies, Inc. Securities Litigation, Case No. 3:04-cv-1175. The

Rosen Law Firm was sole Lead Counsel in this consolidated class action in the U.S. District

Court for the District of Connecticut. The action alleged violations of §§ 10b and 20(a) of the

Securities Exchange Act arising out of the defendants alleged failure to disclose material adverse

information concerning the Company’s products under development and misrepresenting the

amount of time it would take to commercialize the products. Plaintiffs settled the case for a $1.2

million cash payment to class members.

In re: M.H. Meyerson & Co. Securities Litigation, Case No. 02-CV-2724. This class

action, in which the Rosen Law Firm was sole Lead Counsel, was filed in U.S. District Court for



District of New Jersey. The complaint alleged violations of §§10b and 20(a) of the Securities

Exchange Act based on allegedly false and misleading SEC filings related to the planned launch

of an online brokerage business, and other material misrepresentations, which allegedly inflated

the price of Meyerson stock during the class period. Plaintiffs settled the case for a $1.2 million

payment to class members.

In re OPUS360 Corp. Securities Litigation, Case No. 01-Civ-2938. The Rosen Law Firm

was Co-Lead Counsel for this action brought in the Southern District of New York alleging

violations of the federal securities laws arising from a $75.0 million initial public offering of

common stock by the defendant issuer and a syndicate of underwriters including JP Morgan and

Robertson Stephens, Inc. The Court certified the action as a class action and approved a final

settlement.

Ansell v. National Lampoon, Inc., Case No. CV10-9292-PA (AGRx). The Rosen Law

Firm was sole Lead Counsel in this class action in the U.S. District Court for the Central District

of California. The complaint alleged violations of §§10b and 20(a) of the Securities Exchange

Act arising out of a market manipulation scheme involving National Lampoon’s common stock.

The parties agreed to settle this action for $1 million in cash.

Fouladian v. Busybox.com, Inc., Case No. BC 248048. The Rosen Law Firm was Co-

Lead Counsel in this class action brought in California Superior Court, Los Angeles County.

The action arose from a $12.8 million initial public offering of securities by the defendant issuer

and underwriter. California and federal securities laws claims (Cal. Corp. Code §25401 and §11

of 1933 Act) were brought on behalf of a nationwide class of public offering investors. The

Court approved a $1.0 million cash settlement to a nationwide class of investors.

Gianoukas v. Tullio and Riiska, Case No. 02CC18223. The Rosen Law Firm was lead

counsel to a group of twenty-one plaintiffs that brought claims of fraud and negligent



misrepresentation in California Superior Court, Orange County against the former Chief

Executive and Chief Financial Officers of a publicly traded software company, NQL Inc. The

complaint alleged that the officers issued a series of false and misleading press releases

concerning the business of NQL for the purpose of inducing the purchase and retention of NQL

securities. Plaintiffs settled the action favorably for a confidential amount.

The BoxLot Company v. InfoSpace, Inc., Case No. GIC 779231. The Rosen Law Firm

was plaintiff’s counsel for this action filed in California Superior Court, San Diego County

which arose from the aborted merger agreement and ultimate sale of The BoxLot Company’s

assets to InfoSpace. The action alleged violations of California securities laws (Cal. Corp. Code

§25400 & §25401) and common laws and sought damages of $92.8 million from InfoSpace and

its CEO, Naveen Jain. The case settled favorably for plaintiffs for a confidential amount.

Teague v. Alternate Energy Holdings, Inc., No. 10-CV-634-BLW. The Rosen Law Firm

was sole Lead Counsel in this class action pending in the U.S. District Court for the District of

Idaho. The complaint alleged violations of §§10b and 20(a) of the Securities Exchange Act

arising out of the Company’s issuance of materially false and misleading financial statements

and business condition. The parties settled this action for $450,000.

Huttenstine v. Mast, Case No. 4:05-cv-152 F(3). The Rosen Law Firm is currently

serving as sole Lead Counsel in this class action pending in the U.S. District Court for the

Eastern District of North Carolina. The complaint alleges violations of §§10b and 20(a) of the

Securities Exchange Act arising out of the Company’s material misstatements and omissions

concerning the nature of certain sales contracts it had entered into. Plaintiffs have preliminarily

agreed to settle this action this action for $425,000 cash payment to class members.

Kinzinger v. Paradigm Medical Industries, Inc., Case No. 03-0922608. The Rosen Law

Firm served as sole Lead Counsel in this class action filed in Utah state court alleged violations



of the Utah Securities Act against Paradigm Medical arising out of false and misleading

statements made to investors in a $5.0 million private placement of securities. The court

approved a $625,000 settlement on behalf of the private placement purchasers.

III. SECURITIES CLASS ACTIONS IN WHICH THE ROSEN LAW FIRM P.A. IS CURRENTLY LEAD COUNSEL

Munoz v. China Expert Technology, Inc., Case No. 07-CV-10531 (AKH). The Rosen

Law Firm is currently serving as sole Lead Counsel in this class action pending in the U.S.

District Court for the Southern District of New York. The complaint alleges violations of §§10b

and 20(a) of the Securities Exchange Act arising out of: (a) the Company’s issuance of

materially false statements of revenues and earnings; and (b) the Company’s auditors’ issuance

of materially false and misleading “clean” audit opinions. The class has been certified and the

action is in discovery.

Nguyen v. Radient Pharmaceuticals Corporation, Case No. CV11-0405-DOC (MLGx).

The Rosen Law Firm is currently serving as sole Lead Counsel in this class action pending in the

U.S. District Court of the Central District of California. The complaint alleges violations of

§§10b and 20(a) of the Securities Exchange Act arising out of the issuance of false statements

concerning the Company’s clinical trial involving its principal product. The class has been

certified and discovery is closed. Trial is to commence in November 2013.

Katz v. China Century Dragon Media, Inc., Case no. CV 11-02769 JAK (SSx). The

Rosen Law Firm is currently serving as sole Lead Counsel in this class action pending in the

U.S. District Court for the Central District of California. The complaint alleges violations of §§

11, 12(a)(2), and 15 of the Securities Act of 1933 and §§10b and 20(a) of the Securities

Exchange Act arising out the Company’s issuance of materially false and misleading financial

statements. The class has been certified and the action is in discovery.



Snellink v. Gulf Resources, Inc., No.CV11-3722-ODW (MRWx). The Rosen Law Firm

is currently serving as co-Lead Counsel in this class action pending in the U.S. District Court for

the Central District of California. The complaint alleges violations of §§ 10b and 20(a) of the

Securities Exchange Act arising out the Company’s failure to disclose the related party nature of

certain transactions, and the Company’s issuance of false financial statements. This action is in

discovery.

Zhu v. UCBH Holdings, Inc., No. C 09-4208-JSW. The Rosen Law Firm is currently

serving as sole Lead Counsel in this consolidated class action pending in the U.S. District Court

for the Northern District of California. The complaint alleges violations of §§10b and 20(a) of

the Securities Exchange Act arising out of the Company’s issuance of materially false and

misleading statements of revenue and earnings, and the Company’s banking operations and

business. This action is in discovery.

In re China Intelligent Lighting and Electronics, Inc. Securities Litigation, No. 2:11-CV-

02768 PSG (SSx). The Rosen Law Firm is currently serving as co-Lead Counsel in this

consolidated class action pending in the U.S. District Court for the Central District of California.

The complaint alleges violations of §§ 11, 12(a)(2), and 15 of the Securities Act of 1933 and

§§10b and 20(a) of the Securities Exchange Act arising out the Company’s issuance of

materially false and misleading financial statements. This action is in discovery.

Cheung v. Keyuan Petrochemicals, Inc., No. CV 11-9495-PSG (JCGx). The Rosen Law

firm is currently serving as sole Lead Counsel in this class action pending in the U.S. District

Court for the Central District of California. The complaint alleges violations of §§ 10b and 20(a)

of the Securities Exchange Act of 1934 in connection with the Company’s failure to disclose

material related party transactions in periodic reports it filed with the SEC. This action is in

discovery.



In re Puda Coal Securities Litigation, No. 11-CV-2598 (BSJ)(HBP). The Rosen Law

Firm is currently serving as co-Lead Counsel in this consolidated class action pending in the U.S.

District Court for the Southern District of New York. The complaint alleges violations of the

Exchange Act and Securities Act arising out the Company’s issuance of materially false and

misleading financial statements. This action is in discovery.

Kubala v. SkyPeople Fruit Juice, No. 11-CV-2700 (PKC). The Rosen Law Firm is

currently serving as sole Lead Counsel in this consolidated class action pending in the U.S.

District Court for the Southern District of New York. The complaint alleges violations of §§10b

and 20(a) of the Securities Exchange Act out of the Company’s failure to disclose material

related party transactions that rendered the Company’s financial statements false. This action is

in discovery.

Guimetla v. Ambow Education Holding Ltd., No. CV-12-5062-PSG(AJWx). The Rosen

Law Firm is currently serving as sole Lead Counsel in this class action pending in the U.S.

District Court of the Central District of California. The complaint alleges violations of the

Securities Exchange Act of 1934 in connection with the Company’s issuance of materially false

and misleading financial statement. This action is at pleading stage.

Campton v. Ignite Restaurant Group, Inc., No. 12-CV-2196. The Rosen Law Firm is


the Southern District of Texas. The complaint alleges violations of the Securities Act of 1933 in

connection with material misrepresentations in the Company’s Registration Statement and

Prospectus issued for the company’s IPO. This action is at the pleading stage.

Leshinsky v. SmartHeat, Inc., No. 12-CV-6682 (PAE). The Rosen Law Firm is currently

serving as sole Lead Counsel in this class action pending in the U.S. District Court of the

Southern District of New York. The complaint alleges violation of §10b and 20(a) of the



Securities Exchange Act out of the Company’s failure to disclose insider stock sales. This action

is at the pleading stage.

Snellink v. Universal Travel Group, Inc., Case No.11-CV-2164 (SDW). The Rosen Law

Firm is currently serving as sole Lead Counsel in this class action pending in the U.S. District

Court for the District of New Jersey. The complaint alleges violations of §§10b and 20(a) of the

Securities Exchange Act arising the issuance of false statements concerning the Company’s true

financial condition. This action is at the pleading stage.

Vandevelde v. China Natural Gas, Inc., Case no. 10-728-SLR. The Rosen Law Firm is

currently serving as sole Lead Counsel in the class action pending in the U.S. District Court for

the District of Delaware. The complaint alleges violations of §§10b and 20(a) of the Securities

Exchange Act arising out of the issuance of materially false and misleading financial statements.

This action is at the pleading stage.

In re L&L Energy, Inc. Securities Litigation, No. C11-1423-RSL. The Rosen Law Firm

is currently serving as sole Counsel in this class action pending in the U.S. District Court for the

Western District of Washington. The complaint alleges violations of §§ 10b and 20(a) of the

Securities Exchange Act arising out the Company’s issuance of false financial statements. This

action is at the pleading stage.

Yang v. Tibet Pharmaceuticals, Inc., No. 12-54-WAL-GWC. The Rosen Law Firm is

currently serving as sole Lead Counsel in this consolidated class action pending in the U.S.

District Court of the Virgin Islands, St. Croix Division. The complaint alleges violations of the

Securities Act of 1933 in connection with material misrepresentations in the Company’s

Registration Statement and Prospectus issued for the Company’s public offering of common

stock. The action is at the pleading stage.



Luo v. Qiao Xing Universal Resources, Inc., No. 12-45-WAL-GWC. The Rosen Law

Firm is currently serving as sole Lead Counsel in this consolidated class action pending in the

U.S. District Court of the Virgin Islands, St. Croix Division. The complaint alleges violations of

the Exchange Act in connection with the Company’s issuance of materially false and misleading

financial statements. The action is at the pleading stage.

Howard v. Chanticleer Holdings, Inc.., No. 12-CV-81123-JIC. The Rosen Law Firm is


the Southern District of Florida. The complaint alleges violations of the Securities Act of 1933

in connection with material misrepresentations in the Company’s Registration Statement and

Prospectus issued for the Company’s public offering of common stock and warrants. The action

is at the pleading stage.

Cole v. Duoyuan Printing, Inc., Case No. 10-CV-7325(GBD). The Rosen Law Firm is

currently serving a Co-Lead Counsel in this class action pending in the U.S. District Court for

the Southern District of New York. The complaint alleges violations of §§ 11, 12(a)(2), and 15

of the Securities Act of 1933 and §§10b and 20(a) of the Securities Exchange Act arising out of

the Company’s issuance of materially false and misleading statements about the Company’s true

financial condition and adequacy of the Company’s internal controls. This action is at the

pleading stage.

Blitz v. AgFeed Industries, No. 3:11-0992. The Rosen Law Firm is currently serving as

co-Lead Counsel in this consolidated class action pending in the U.S. District Court for the

Middle District of Tennessee. The complaint alleges violations of §§10b and 20(a) of the

Securities Exchange Act arising out the Company’s issuance of materially false and misleading

financial statements. This action is at the pleading stage.



Valentino v. KPMG LLP, No. 8:13CV22. The Rosen Law Firm is currently serving as

sole Lead Counsel in this class action pending in the U.S. District Court for the District of

Nebraska. The complaint alleges violations of §§10b and 20(a) of the Securities Exchange Act

against TierOne Corporation’s former independent auditor, KPMG. This action is at the

pleading stage.

Masterson v. Commonwealth Bankshares, No. 13-62-MSD-DEM. The Rosen Law Firm

is currently serving as sole Lead Counsel in this class action pending the U.S. District Court for

the Eastern District of Virginia. The complaint alleges violations of §§ 10b and 20(a) of the

Securities Exchange Act arising out the Bank’s issuance of materially false and misleading

statements about its loan portfolio. This action is at the pleading stage.

In re ChinaCast Education Corporation Sec. Litig., No. CV 12-4621- JFW (PLAx). The

Rosen Law Firm is currently serving as co-Lead Counsel in this consolidated class action

currently on appeal with the U.S. Court of Appeals or the Ninth Circuit. The complaint alleges

violations of §§10b and 20(a) of the Securities Exchange Act arising out the Company

overstating it assets and cash balances and misstating the Company’s internal controls.

Petrie v. Electronic Game Card, Inc., No. SACV 10-0252-DOC (RNBx). The Rosen

Law Firm is currently serving as sole Lead Counsel in this consolidated class action currently on

appeal with the U.S. Court of Appeals for the Ninth Circuit. The complaint alleges violations of


materially false and misleading financial statements in violation of Generally Accepted

Accounting Principles and the Company’s publicly stated internal policies.

Wolfe v. AspenBio Pharma, Inc., No. 11 CV 165-REB-KMT. The Rosen Law Firm is

currently serving as sole Lead Counsel in this class action currently on appeal with the U.S.

Court of Appeals for the Tenth Circuit. The complaint alleges violations §§10b and 20(a) of the



Securities Exchange Act arising out the Company’s misstatements and omissions concerning the

effectiveness of its main product AppyScore.


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