Levi & Korsinsky Announce NIO Lawsuit; NIO Class Action

Class Action Reports

Levi & Korsinsky Announces NVFY Lawsuit; NVFY Class Action

Levi & Korsinsky, LLP

January 23, 2019

Barney v. Nova Lifestyle, Inc., et al 2:18-cv-10725-AB-AFM — On December 28, 2018, investors sued Nova Lifestyle, Inc., (“Nova Lifestyle” or the “Company”) in United States District Court, Central District of California. The federal securities class action alleges that plaintiffs acquired Nova Lifestyle stock at artificially inflated prices between December 3, 2015 and December 20, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the NVFY Lawsuit, please contact us today!

Summary of the Allegations

Company Background

According to its website, the Company (NASDAQ: NVFY) designs and makes furniture including “sofas, dining room sets, cabinets, office furniture and related components, bedroom sets, and various accessories in matching collections.”

The Company says that its products, which are made in the United States, Europe and Asia, “include lifestyle brands such as Diamond Sofa, Nova QwiK, and Bright Swallow International.” Nova Lifestyle also says its designs target “style-conscious middle and upper middle-income consumers in the U.S., China, Europe, and elsewhere in the world.”

Nova Lifestyle is incorporated in Nevada and its headquarters is located in Commerce, California.

Summary of Facts

Nova Lifestyle and four of its current and/or former senior officers (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.

Specifically, they stand accused of omitting truthful information about an alleged  “strategic alliance,” and the reporting of inflated sales from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Nova Lifestyle stock to trade at artificially inflated prices during the time in question.

The truth came out on December 21, 2018. That day, Andri Capital issued a report on Seeking Alpha stating that, “Nova Lifestyle’s revenues in 2016 and 2017 were overstated because the Company booked sales to a dissolved and nonexistent company.” The report also indicated that, “Nova Lifestyle’s purported strategic alliance with Shanxi Wanqing was meant to deceive investors as Shanxi Wanqing was a sham company.”

A closer look…

As alleged in the December 28 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.

For instance, in a press release issued at the beginning of the Class Period, the Company discussed its “strategic alliance agreement with (China) Shanxi Wanqing Senior Care Service Group.” In this context, it said in pertinent part: “Shanxi Wanqing plans to invest a total amount of 3.0 billion RMB (USD $460 Million) to build a major senior care center in Luoyang, Henan province in China, and Nova LifeStyle will operate as the lead designer and manufacturer for all furnishings in the complex.”

Then, on a form filed with the SEC on April 14, 2017, the Company stated in relevant part: “Our largest customers in 2016 were Shanxi Wanqing Senior Care Service, Group and Actona Company A/S, a global furniture distributor, which accounted for 10.8% and 9.7% of our total sales in 2016, respectively.”

Finally, on a form filed with the SEC on March 29, 2018, Nova Lifestyle also stated in relevant part: “Our largest customers in 2017 were Merlino Lewis LLP, Shanxi Wanqing Senior Care Service, and Home Centre LLC, which accounted for 24.3%, 13.7% and 11.5% of our total sales in 2017, respectively.”

Impact of the Alleged Fraud on Nova Lifestyle’s Stock Price and Market Capitalization

Closing stock price prior to disclosures:

 

$0.77
Closing stock price the trading day after disclosures:

 

$0.46
One day stock price decrease (percentage) as a result of disclosures:

 

40.23%

The following chart illustrates the stock price during the class period:

NVFY Class Action NVFY Lawsuit

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE:. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Nova Lifestyle common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

NVFY Lawsuit NVFY Class Action

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.