Law Offices of Howard G. Smith Announces Investigation of AutoChina International Limited

BENSALEM, Pa.--(BUSINESS WIRE)--

Law Offices of Howard G. Smith announces that it is investigating potential claims against AutoChina International Limited (“AutoChina” or the “Company”) AUTC concerning possible violations of federal securities laws. The investigation is related to allegations that certain statements issued by the Company between October 5, 2009 and September 13, 2011 regarding AutoChina's business and financial performance were false and misleading.

AutoChina, describes itself as the owner and operator of the largest “one-stop” commercial vehicle sales, servicing, leasing and support network in the People's Republic of China. The Company offers its services through its network of more than 300 stores, each of which is Company-owned and operated.

On June 30, 2011, the Company announced that it could not file its Annual Report in a timely fashion, and revealed that the Securities and Exchange Commission (SEC) had questioned the Company's accounting for earn-out shares, and that the SEC was “conducting a non-public investigation relating to AutoChina and, in that connection, AutoChina and one of its officers have received subpoenas for information.” Following this news, shares of the Company's stock fell $1.22 per share, to close on June 30, 2011 at $29.19 per share, on heavy trading volume.

Also on June 30, 2011, after the close of the market, AutoChina issued a press release with additional disclosures, including that the Company “expects to restate its previously issued financial statements for the year ended December 31, 2009, and subsequent periods to recognize a derivative liability relating to the Earn-out Share Provision.” According to the Company, “SEC staff members believe the Earn-out should be treated as a derivative financial instrument, and as a result, a liability should have been initially recorded at its fair value at the time of the initial business combination.” In addition, the Company disclosed that it had “identified a material weakness in its internal control over financial reporting as of December 31, 2010, due to a lack of requisite internal U.S. GAAP experience.” As a result of this additional news, shares of the Company's stock fell an additional $3.66 per share, or over 12.5 percent, to close on July 1, 2011 at $25.53 per share, on unusually heavy trading volume.

Then, on September 12, 2011, AutoChina announced that it had received a letter from NASDAQ, which stated that NASDAQ's staff determined that providing the Company until December 31, 2011 to file its Annual Report on Form 20-F for the period ended December 31, 2010 was not warranted. The letter further stated that AutoChina's securities would be delisted from NASDAQ on September 19, 2011 unless the Company appealed the foregoing determination.

On this news, shares of the Company's stock fell an additional $9.30 per share, or almost 40 percent, to close on September 13, 2011 at $14.12 per share, on unusually heavy trading volume. The following day the Company's stock fell an additional $4.20 per share, or almost 30 percent, to close on September 14, 2011 at $9.92 per share.

If you purchased AutoChina securities between October 5, 2009 and September 13, 2011 , if you have information or would like to learn more about these claims, or if you wish to discuss these matters or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, Toll Free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at http://www.howardsmithlaw.com.