NQ Mobile under US probe over false information
A U.S. law firm is investigating Chinese mobile security company, NQ Mobile, over allegations it violated U.S. securities law by making "materially false and misleading statements" regarding its business.
In a statement Monday, Bronstein, Gewirtz & Grossman said it was working on behalf of purchasers of the securities of NQ Mobile, which was formerly called NetQin. Its investigation will focus on whether NQ Mobile overstated its revenue by inflating its user base by at least 10 times, which led to its financial statements being materially false and misleading at all relevant times, said the corporate litigation law firm.
It said the investigation was sparked by a Seeking Alpha article posted on Dec. 10 which claimed NQ Mobile overstated its industry position with its "user base has been inflated more than 10-fold". The article has since been taken down from the U.S. stock market news site.
NQ Mobile rejected the claims in a statement dated Dec. 11, citing a Sino MR report which said the Chinese security vendor had 63 percent of registered mobile security users in China in the third quarter.
NQ Mobile was involved in another scandal in March 2011 when reports said it deliberately infected smartphones with malware before charging users a fee to eradicate the virus. The company, though, deined any wrongdoing.