NEW YORK, May 2, 2011 /PRNewswire/ -- Deer Consumer
Products, Inc. (Nasdaq: DEER) (website: http://www.deerinc.com/), a
leading provider of "DEER" branded consumer products to Chinese
consumers and a leading vertically integrated manufacturer of small
household and kitchen appliances for global customers, publicly
announces today that the Company has received additional evidence
of continuing illegal short selling in DEER stock.
The Company believes its common stock has been manipulated in
collusion among "naked" short sellers, which may include U.S. and
off-shore based hedge funds/individuals that distribute false and
fabricated information concerning the Company via various websites
and blogs, including through SeekingAlpha.com, a website owned by
Seeking Alpha Ltd., an Israeli company.
In what appears to be a part of this attempted manipulation, a
purported class action complaint was filed against the Company by
The Rosen Law Firm. This complaint is expressly based upon the
false and defamatory reports concerning the Company that were
authored by a fictitious character - "Alfred Little" and published by Seeking Alpha
Ltd. even though Seeking Alpha Ltd. had deleted certain false
reports prior to the filing of the complaint. Litigation counsel
for DEER has notified The Rosen Law Firm that the complaint
contains numerous false and inaccurate allegations and the Company
will seek sanctions against the plaintiff and The Rosen Law Firm if
the complaint is not withdrawn in its entirety.
BACKGROUND FACTS:
During the months of March and April
2011, the Company believes that an attempted market
manipulation scheme by illegal short sellers acting in collusion
caused DEER's share price to plunge from more than $11 per share on March
21 to as low as $6.12 on
April 4 on heavy daily volume,
causing a temporary loss of approximately $165 million in market capitalization for DEER's
shareholders.
To protect DEER's shareholders and as a matter of good corporate
governance, DEER has repeatedly confirmed that its filings with the
Securities and Exchange Commission, including its latest annual
report, 10-K filing with audited financials are accurate and are in
full compliance with SEC disclosure requirements. DEER has also
affirmed its 2011 earnings guidance and a dividend policy. In
addition, DEER paid initial quarterly cash dividend of $0.05 per share on April
14 to shareholders of record on March
31. DEER has hosted numerous visits by independent research
analysts, institutional investors and global investment banks. The
Company notes that DEER's share price has recovered approximately
66% since April 4 to a closing price
of $10.14 on April 29.
ADDITIONAL EVIDENCE OF ILLEGAL SHORT SELLING:
At present, a large number of DEER shares sold short have failed
to settle for 30 consecutive settlement days, which indicates naked
short positions that still exist today. The number of such shares
has exceeded 700,000 shares on certain trading days. Also,
according to publicly available market data, DEER's common stock
has been on the list of Nasdaq's "Threshold" securities under the
SEC REG SHO rules, for at least 30 consecutive settlement days,
indicating failure to settle trades among securities clearing firms
for more than 30 consecutive settlement days.
As one part of a broader plan to take steps to protect the
Company and its shareholders from this apparent illicit short
selling activity, DEER's litigation counsel has communicated
and will continue to communicate with the legal and compliance
departments of various securities clearing and custodian
firms to warn them of possible illegal short selling activities
still taking place in DEER's common stock and to discover
information concerning share delivery obligations and compliance
with U.S. securities laws. DEER is optimistic about receiving full
cooperation from these registered clearing firms.
DEER intends to discover and take legal actions against all
parties that assist and abet in the illegal short selling
activities in DEER.
"ALFRED LITTLE" DOES NOT EXIT,
USES FABRICATED BIOGRAPHY TO DEFRAUD THE GENERAL PUBLIC
The Company believes that "Alfred
Little" is a fictitious character - a disguise used by one
or more illegal short sellers in the short sale scheme against DEER
and other public companies. According to our investigation,
"Alfred Little" is not a real
person. His "professional biography" published on his website and
on SeekingAlpha.com was fabricated, with the purpose to mislead and
defraud the investing public. "Alfred
Little's" published biography includes claims that he had
years of experience as an auditor at Deloitte, worked for large
global companies and had years of investment experience in
China, published a book on
China, etc. cannot be verified.
Further, in the attack on DEER, "Alfred
Little" published a 3 month old prepaid phone card that was
never used as his purported contact number for concerned investors.
In addition, "Alfred Little" quoted
statements from several Chinese government officials as witnesses
to support his various false allegations against DEER. These
Chinese officials in fact do not exist. "Alfred Little" further made false allegations on
his "channel checks" of Chinese retail stores while he failed to
disclose his naked short positions in DEER and ignored DEER's
repeated public disclosure about the Company's product distribution
process as well as its corporate structure. "Alfred Little's" various articles, timely
published in collusion with short sellers who immediately sold
large blocks of DEER's stock in market orders that intentionally
created fear in the general public to drive down DEER's share
price. Short sellers have profited handsomely at the expense of
DEER's thousands of shareholders. DEER will continue its vigorous
investigation and discovery of the network of illegal short sellers
that have damaged the reputation and destroyed value in U.S. listed
public companies.
DEER TO SEEK SANCTIONS AGAINST PURPORTED "CLASS ACTION"
PLAINTIFF'S LAW FIRM
On April 29, 2011, "The Rosen Law
Firm" filed a "class action" complaint against the Company on
behalf of "James Rose", an
individual who allegedly purchased 2,000 shares of DEER common
stock during 2010. The Company strongly denies the
allegations in the complaint and counsel for DEER has already
notified The Rosen Law Firm that the Company intends to seek
sanctions under Rule 11 of the Federal Rules of Civil Procedure
against The Rosen Law Firm if the complaint is not withdrawn in its
entirety.
The Company also notes the following concerning the purported
class action complaint by The Rosen Law Firm:
1. The complaint was filed in total disregard of the
Company's prior warnings concerning illegal short selling
activities in DEER.
2. The complaint is explicitly based on the false and
defamatory reports authored by an "Alfred
Little" and published by Seeking Alpha Ltd. But the Company
believes that "Alfred Little" does
not exist and is a fictitious character - a disguise used by one or
more illegal short sellers in the short sale scheme against DEER
and other companies publicly traded on U.S. stock exchanges.
3. The complaint includes false and defamatory allegations
that were contained in an article published on SeekingAlpha.com
that Seeking Alpha Ltd. removed from the web-site after receiving
true and accurate information from the Company. The Company
believes that The Rosen Law Firm's willingness to include such
allegations in the complaint under such circumstances demonstrates
extreme recklessness and an utter disregard of the truth.
DEER IS FOCUSED ON GROWING A STRONG COMPANY
DEER's management remains totally committed to corporate
governance and enhancing long term shareholder value through our
continued pursuit of corporate excellence and business expansion.
DEER looks forward to another year of record sales and earnings
growth in 2011.
About Deer Consumer Products, Inc.
Deer Consumer Products, Inc. is a NASDAQ Global Select Market
listed U.S. company with its primary operations in China. Deer has a 16-year operating business
as well as a strong balance sheet. Operated by Deer's founders and
supported by more than 100 patents, trademarks, copyrights and
approximately 2,000 staff, Deer is a leading provider of "DEER"
branded consumer products to Chinese consumers and leading
vertically integrated manufacturers of small home and kitchen
appliances for global customers. DEER's product lines include
series of small household and kitchen appliances as well as
personal care products designed to make modern lifestyles easier
and healthier. With a large brand name global clientele and a
rapidly expanding China domestic
market footprint, Deer has enjoyed rapid growth in revenues and
earnings in recent years.
Contact Information:
____________________________________
Corporate Contact:
Ms. Helen Wang, President
Deer Consumer Products, Inc.
Tel: 011-86-755-86028300
Email: investors@deerinc.com
SOURCE Deer Consumer Products, Inc.