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The9 Been Sued Over WoW Losses by Shareholders

A class action lawsuit has been filed against online game company The9 (Nasdaq:NCTY) accusing the company of violating the Securities Exchange Act of 1934 by making inaccurately positive statements about company finances between November 15, 2006 and July 15, 2009.

Specifically, the complaint charges that The9 and certain directors and officers failed to disclose that The9 was unlikely to renew its licensing contract with Blizzard Entertainment for 3D MMORPG World of Warcraft. Shares in The9 dropped 18% to $8.35 on July 15, after The9 reported a $36.9 million or 72% reduction in 2008 net income due to the loss of its operating license for World of Warcraft.

Coughlin Stoia Geller Rudman & Robbins LLP has filed the lawsuit on behalf of The9 shareholders in the United States District Court for the Southern District of New York.