Deloitte - ChinaCast Education

JS 44C/SDNY REV.
7/2012
CIVIL COVE* Sj>lEET JUDGE GARDEPHEand the information contained her* neittieWeplace fcr*ipliment the fiftg ari& The JS-44 civil cover sheet
ierA m
Judicial Conference oftheUnited States in September 1974, isrequired for useoftheClerk ofCourt for thepuq
initiating the civil docket sheet.
PLAINTIFFS
pleadings or other papers as required by law, except as pro*edV>*cal rulesWcouH. This formfcppro\e/b]
DEFENDANTS
SPECIAL SITUATIONS FUND III QP, L.P. [see attachment]
DELOITTE TOUCHE TOHMATSU CPA, LTD.; DELOITTE &TOUCHE LLP; ANTONIO SENA; JUSTIN TANG; YIN JIANPING; RICHARD XUE; MICHAEL
SANTOS- and NFD SHFRWOOD
ATTORNEYS (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER

Amiad M. Kushner, Esq.
ATTORNEYS (IF KNOWN)

.
Lowenstein Sandler LLP, 1251 Avenue of the Americas, NY, NY 10020
CAUSE OF ACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE ABRIEF STATEMENT OF CAUSE)
(DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)
212.262.6700
Sections 10(b), 18 and 20(a) of the SE Act of 1934, 15 U.S.C. 78j(b), 78r and 78t(a), and Rule 10b-5, 17 C.F.R. 240.10b-5.
Has this or a similar case been previously filed in SDNY atany time? No [X] Yes D Judge Previously Assigned
If yes, was this case Vol. D Invol.

(PLACE AN [x]IN ONE BOX ONLY)
TORTS
Dismissed. No Yes
No E3
If yes, give date
& Case No.
IS THIS AN INTERNATIONAL ARBITRATION CASE?
Yes D
NATURE OF SUIT
ACTIONS UNDER STATUTES
PERSONAL INJURY
PERSONAL INJURY
FORFEITURE/PENALTY AGRICULTURE OTHER FOOD &

DRUG
BANKRUPTCY
OTHER STATUTES
1)110 [ ]120 11130 [ ]140 11150
I 1151 []152
INSURANCE MARINE MILLER ACT NEGOTIABLE INSTRUMENT RECOVERY OF OVERPAYMENT & ENFORCEMENT OF JUDGMENT MEDICARE ACT RECOVERY OF DEFAULTED STUDENT LOANS
[ ]310 AIRPLANE
[ ]362 [ 1365 [] 368
[ 1315 AIRPLANE PRODUCT

LIABILITY
[ ] 320 ASSAULT, LIBEL&

SLANDER
[ J330 FEDERAL
EMPLOYERS' LIABILITY
11610 PERSONAL INJURY [ ] 620 MED MALPRACTICE PERSONAL INJURY 11625 PRODUCT LIABILITY ASBESTOS PERSONAL INJURY PRODUCT LIABILITY [ [ [ [ ]630 1640 1650 )660
[ ] 422 APPEAL
28 USC 158
[ ]400 [1410 11430 I 1450 [ ]460 11470
STATE
[ ] 423 WITHDRAWAL
28 USC 157
DRUG RELATED SEIZURE OF PROPERTY

21 USC 881
PROPERTY RIGHTS
LIQUOR LAWS
RR & TRUCK AIRLINE REGS OCCUPATIONAL
REAPPORTIONMENT ANTITRUST BANKS & BANKING COMMERCE DEPORTATION RACKETEER INFLU ENCED & CORRUPT
[ ] 340 MARINE [ ]345 MARINE PRODUCT

LIABILITY
PERSONAL PROPERTY
[ J350 MOTOR VEHICLE [ ] 355 MOTOR VEHICLE

PRODUCT LIABILITY
1 1370 OTHER FRAUD 11371 TRUTH IN LENDING [ I 380 OTHER PERSONAL [ ]385
PROPERTY DAMAGE PROPERTY DAMAGE PRODUCT LIABILITY
[ ] 820 COPYRIGHTS []830 PATENT [ ] 840 TRADEMARK
ORGANIZATION ACT (RICO) [ ]480 [ ]490 [1810 W850
CONSUMER CRfeDIT
CABLE/SATELLITE TV
SAFETY/HEALTH
[ ]690
/
1
OTHER
(EXCL VETERANS)
i 1153
RECOVERY OF OVERPAYMENT
SOCIAL SECURITY
LABOR
SELECTIVE SERVICE SECURITIES/ '

COMMODITIES/
EXCHANGE CUSTOMER
[ 1360 OTHER PERSONAL

INJURY
[ ]861 HIA(1395ff) \
FAIR LABOR STANDARDS ACT LABOR/MGMT RELATIONS
LABOR/MGMT
OF VETERAN'S
BENEFITS
11710
[ 1160 []190
STOCKHOLDERS
SUITS
11720
PRISONER PETITIONS
[ [ [ [
J862 J863 ] 864 ] 865
BLACK LUNG (923). DIWC/DIWW (405(g)) SSID TITLE XVI RSI (405(g))
[1875
CHALLENGE
12 USC 3410
[ 1890 OTHER STATUTORY

ACTIONS
OTHER CONTRACT CONTRACT 1 1195 PRODUCT LIABILITY []196 FRANCHISE
1 1730
[]510 MOTIONSTO
ACTIONS UNDER STATUTES
CIVIL RIGHTS
REPORTING &
FEDERAL TAX SUITS
[1891 AGRICULTURAL ACTS [ ]892 ECONOMIC

STABILIZATION ACT
VACATE SENTENCE
20 USC 2255
[ 1740
REAL PROPERTY
[ ]441 VOTING [ I 442 EMPLOYMENT [ 1443 HOUSING/

ACCOMMODATIONS
[ ]530 HABEAS CORPUS [ 1790 [ ] 535 DEATH PENALTY [ ] 540 MANDAMUS &OTHER [ 1791
DISCLOSURE ACT RAILWAY LABOR ACT OTHER LABOR LITIGATION EMPL RET INC SECURITY ACT
[ ]870 TAXES (U.S. Plaintiffor

Defendant)
[ ]893 ENVIRONMENTAL
MATTERS
[ ] 871 IRS-THIRD PARTY

26 USC 7609
I 1894 ENERGY
ALLOCATION ACT
[ ]895 FREEDOM OF
INFORMATION ACT
IMMIGRATION
[ J900 APPEAL OF FEE

DETERMINATION UNDER EQUAL
1)210 [ I 220 [ ]230 []240 11245

[ ]290
LAND
CONDEMNATION FORECLOSURE RENT LEASE & EJECTMENT
[ ]444 WELFARE [ J445 AMERICANS WITH

DISABILITIES EMPLOYMENT
PRISONER CIVIL RIGHTS
I 1462
NATURALIZATION
APPLICATION
[ ] 550 CIVILRIGHTS [ ] 555 PRISON CONDITION
ACCESS TO JUSTICE
1 1463
[ ) 446 AMERICANS WITH

DISABILITIES -OTHER
HABEAS CORPUSALIEN DETAINEE
[ J950 CONSTITUTIONALITY
OF STATE STATUTES
TORTS TO LAND TORT PRODUCT LIABILITY ALL OTHER REAL PROPERTY
11465
[ ]440 OTHER CIVIL RIGHTS

(Non-Prisoner)
OTHER IMMIGRATION ACTIONS
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UNDER F.R.C.P. 23
DOYOU CLAIM THIS CASE IS RELATED TO A CIVIL CASENOW PENDING IN S.D.N.Y.?

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ORIGIN
IXl 1 r,riir,=,i pZ!L

Proceeding
n o Removed LI 2 j.from
State Court
I-! 3 Remanded [~] 4 Reinstated or U * n.mmHi L_l

from rwupo,
Q 5 Transferredstrict) D 6 Multidistrict LJ | from uition

^^
D 7 Appeal to District Judgefrom
Magistrate Judge
a. all parties represented

L] b. At least one
party Is pro se.
court"3'6
BASIS OF JURISDICTION
Judgment
IF DIVERSITY, INDICATE
(PLACE AN x INONEBOXONLY)
D1U.S. PLAINTIFF 2U.S. DEFENDANT H 3FEDERAL QUESTION (U.S. NOT APARTY)

(Place an [X] in onebox for Plaintiff andone box for Defendant) PTF DEF
D4 DIVERSITY
(28 USC 1332, 1441)
SJSt? ^E^S?^'
CITIZENSHIP OF PRINCIPAL PARTIES (FOR DIVERSITY CASES ONLY)

PTF DEF PTF DEF
CITIZEN OF THIS STATE
[]1 []1
CITIZEN ORCOUNTRY OF A SUBJECT FOREIGN

INCORPORATED or PRINCIPAL PLACE
OF BUSINESS IN THIS STATE
[]3[]3
[]4[]4
J!^^^ ANOTHER STATE JS^^^1*06 N5 t]5 OF BUSINESS IN

FOREIGN NATION []6 []6
CITIZEN OF ANOTHER STATE []2 []2
PLAINTIFF(S) ADDRESS(ES) AND COUNTY(IES)
[see attachment]
DEFENDANT(S) ADDRESS(ES) AND COUNTY(IES)
[see attachment]
REPRESENTATION IS HEREBY MADE THAT, AT THIS TIME, IHAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TO ASCERTAIN THE
RESIDENCEADDRESSES OF THE FOLLOWING DEFENDANTS:
Antonio Sena, Justin Tang, Yin Jianping, Richard Xue, Michael Santos, Ned Sherwood
Check one-
THIS ACTION SHOULD BE ASSIGNED TO:

SIGNATURE OF ATTORNEY OF RECORD
(DO NOT check either box if this a PRISONER PETITION/PRISONER CIVIL RIGHTS COMPLAINT.)
D WHITE PLAINS
IE MANHATTAN
DATE 02/15/13
ADMITTED TO PRACTICE IN THIS DISTRICT
^^^^^
RECEIPT #
""
i
N YES (DATE ADMITTED Mo.

Attorney Bar Code # AK2332
Yr. 2005
Magistrate Judge is to be designated bythe Clerk:of the Court. i
^^MWM ^ f "Wflll
.
Deputy Clerk, DATED
Magistrate Judge _ ^
Ruby J. Krajick, Clerk ofCourt by
is so Designated.
UNITED STATES DISTRICT COURT (NEW YORKSOUTHERN)
CIVIL COVER SHEET ATTACHMENT
SPECIAL SITUATIONS FUND, ET AL v. DELOITTE TOUCHE, ET AL

PLAINTIFFS
SPECIAL SITUATIONS FUND III QP, LP.; SPECIAL SITUATIONS CAYMAN FUND, LP.; COLUMBIA PACIFIC OPPORTUNITY FUND, LP.; FIR TREE VALUE MASTER FUND, LP.; FIR TREE CAPITAL OPPORTUNITY MASTER FUND, LP.; LAKE UNION CAPITAL FUND LP.; LAKE UNION CAPITAL TE
FUND LP.; ASHFORD CAPITAL MANAGEMENT, INC.; ZS EDU, LP.; and MRMP-MANAGERS, LLC,
PLAINTIFFS ADDRESSSES AND COUNTIES
Special Situations Fund III QP, L.P., 527 Madison Avenue, New York, New York, 10022, New York
County
Special Situations Cayman Fund, LP., 527 Madison Avenue, New York, New York, 10022, New
York County
Fir Tree Value Master Fund, LP., 505 Fifth Avenue, New York, New York, 10017, New York
County
Fir Tree Capital Opportunity Master Fund, LP., 505 Fifth Avenue, New York, New York, 10017,
New York County
Columbia Pacific Opportunity Fund, LP., 1910 Fairview Ave East, Seattle, Washington 98102
Lake Union Capital Fund LP., 601 Union Street, Seattle, Washington 98101 Lake Union Capital TE Fund LP., 601 Union Street, Seattle, Washington 98101
Ashford Capital Management Inc., One Walkers Mill Road, Wilmington, DE 19807
ZS EDU L.P., 1133 Avenue ofthe Americas, New York, New York 10036. Alist of its purchases of
ChinaCast common stock duringthe relevant period is attached hereto as Exhibit I.
MRMP-Managers LLC, c/o South Dakota Trust Co., 201 South Philips Avenue, Suite 200, Sioux
Falls, South Dakota 57104-6317
27812/2
02/15/2013 23503927.1
DEFENDANTS ADDRESSES AND COUNTIES
Deloitte Touche Tohmatsu CPA Ltd., 30/F Bund Center, 222 Yan An Road East, Shanghai, China.
Deloitte &Touche LLP, 1633 Broadway, New York, New York, New York County
-2-
JUDQ
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
SPECIAL SITUATIONS FUND III QP, L.P.; SPE|I/fl> Efl

SITUATIONS CAYMAN FUND, L.P.; COLUMBIA PACIFIC OPPORTUNITY FUND, L.P.; FIR TREE VALUE MASTER FUND, L.P.; FIR TREE CAPITAL OPPORTUNITY MASTER FUND, L.P.; LAKE UNION CAPITAL FUND L.P.; LAKE UNION CAPITAL TE
N 1094
FUND L.P.; ASHFORD CAPITAL MANAGEMENT, INC.; ZS EDU L.P.; and MRMP-MANAGERS, LLC,
Plaintiffs,
-v-
u>
DELOITTE TOUCHE TOHMATSU CPA, LTD.; DELOITTE & TOUCHE LLP; ANTONIO SENA; JUSTIN
*".
TANG; YIN JIANPING; RICHARD XUE; MICHAEL SANTOS, JOHN AND JANE DOES 1-10; and ABC
CORPS. 1-10,
Defendants.
COMPLAINT AND JURY DEMAND
Plaintiffs Special Situations Fund III QP, L.P.; Special Situations Cayman Fund, L.P.; Fir
Tree Value Master Fund, L.P.; Fir Tree Capital Opportunity Master Fund, L.P.; Columbia
Pacific Opportunity Fund, L.P.; Lake Union Capital Fund L.P.; Lake Union Capital TE Fund
L.P.; Ashford Capital Management, Inc.; ZS EDU L.P.; and MRMP-Managers, LLC Trust
(collectively, the "Investors" or "Plaintiffs") are purchasers of securities issued by ChinaCast
Education Corporation, Inc. ("ChinaCast," or the "Company"). Plaintiffs, by their undersigned

attorneys, by way of Complaint and Jury Demand, for their federal securities law claims against
ChinaCast's auditors, defendants Deloitte Touche Tohmatsu CPA, Ltd. ("DTTC") and Deloitte
& Touche LLP ("Deloitte US" and together with DTTC, "Deloitte"), and ChinaCast's former
directors and officers Antonio Sena, Justin Tang, Yin Jianping, Richard Xue and Michael Santos
(the "Individual Defendants," and, collectively with Deloitte, John and Jane Does 1-10, and ABC
Corps. 1-10, "Defendants"), allege the following upon personal knowledge as to themselves and
their own acts, and upon information and belief as to all other matters.
Plaintiffs' information and belief are based on, inter alia, investigation made by and
through their attorneys, which investigation includes, among other things, a review and analysis
of: ChinaCast's filings with the U.S. Securities and Exchange Commission ("SEC"); public
documents and media reports concerning ChinaCast and Deloitte; and certain documents
obtained or maintained by ChinaCast. Many of the facts supporting the allegations contained
herein are known only to the Defendants or are exclusively within their custody and/or control.
Plaintiffs believe that further substantial evidentiary support will exist for the allegations in this
Complaint after a reasonable opportunity for discovery.
NATURE OF THE ACTION
1. Plaintiffs are investment funds and entities that purchased the securities of ChinaCast,
a Delaware company, the common stock of which traded on the NASDAQ under the symbol
CAST. Plaintiffs bring this action under the federal securities laws to recover for the tens of
millions of dollars in investment losses they suffered on ChinaCast securities purchased during
the period ofMarch 31, 2008, through and including March 30, 2012, as a result ofnumerous
false and misleading statements in the Company's annual reports and audited financial statements for the years ending December 31, 2007, 2008, 2009, and 2010. These annual reports
and financial statements were filed with the SEC from March 2008 through February 2012 and
carried the imprimatur ofDeloitte - one ofthe "Big Four" global accounting firms - whose name investors rely on as an independent auditor and gatekeeper ofaccurate financial reporting.
2. In this case, although ChinaCast is a Delaware company traded on a U.S. stock
exchange with significant U.S. investors, the Company's operations, providing post-secondary
-2-
education and e-learning services, are in China. As a result, Plaintiffs relied in particular on the
fact that Deloitte - considered one of top global accounting firms - had a long term relationship with the Company and represented to the Company's shareholders, through DTTC, that it
conducted its audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (the "PCAOB"). 3. PCAOB standards required Deloitte to plan and perform its audits of ChinaCast to
obtain reasonable assurance about whether the Company's financial statements were free of
material misstatements, including, inter alia, by examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Deloitte US was integrally involved in
the ChinaCast audits, controlling and passing on issues of compliance with U.S. accounting standards and Generally Accepted Accounting Principles ("GAAP"). Plaintiffs relied on the fact that Deloitte was "kicking the tires" to verify that the reported assets, liabilities, statements of operations and income, and all of the other financial information of the Company on which the
Investors relied to make their purchasing decisions, presented fairly and in all material respects
the financial position of the Company.
4. ChinaCast's business did not make it a complicated company to audit. In 2007, the
Company's business and operations were limited, and its primary assets were cash and term deposits, i.e., deposits placed with financial institutions with remaining maturities of greater than
three months but less than one year when purchased. In 2008, the Company started to pursue a
strategic move into the "bricks and mortar" university business, resulting in the Company
(supposedly) purchasing one university a year for each of 2008, 2009 and 2010. For each of the years in the audited 2007 through 2010 period, the Company had only one or two major
transactions per year, the truth of which would have been easily verifiable had Deloitte done the
-3-
bare minimum of what was required in conducting an audit in accordance with PCAOB
standards.
5. Instead, in violation of its duties as an independent financial watchdog, Deloitte put
its name and brand behind the certification of financial statements that were almost entirely false.
Examples of Deloitte's egregious failure to conduct any real audit include:
For the year ended December 31, 2007, the Company's audited financial statements reported total assets of $130,235 million. Of the Company's total assets, $81,749 million, or more than 62%, were term deposits. However, Deloittefailed to disclose that more than 76% of the term deposits had been pledged to secure the obligations of third parties, which appear to be outside of the Company's scope of business. For the year ended December 31, 2008, the Company's audited financial statements reported total current assets of $93,325 million, of which more than 58%, or $54,265 million, were in term deposits. However, Deloitte failed to disclose that more than 94% of the term deposits had been pledged to secure the obligations of third parties. For the year ended December 31, 2009, the Company's audited financial
statements reported total current assets of $135,249 million, of which more
than 55%, or $74,559 million, were in term deposits. However, Deloitte failed to disclose that approximately 48% of the term deposits had been pledged to secure the obligations of third parties. For the year ended December 31, 2010, the Company's audited financial statements reported total
current assets of $162,959 million, of which more than 65%, or $106,667
million, were in term deposits. However, Deloitte failed to disclose that approximately 85% of the term deposits had been pledged to secure the
obligations of third parties. Had Deloitte tested and confirmed that the term
deposits were unencumbered with the financial institutions that held them, it would have learned of the pledges and could not have certified the total and/or current assets as reported for the years 2007, 2008, 2009 or 2010.
For each of the years ended December 31, 2007, 2008, 2009 and 2010, the
Company's audited financial statements reported that the Company owned 98.5% of ChinaCast Technology (BVI) Limited ("CCT BVI"), which in turn owned 100% of ChinaCast Technology (HK) Limited ("CCT HK"). As a result of the Company's purported majority (indirect) ownership interest in
CCT HK, Deloitte certified the Company's financial statements on a
consolidated basis, including CCT HK. However, the representation was false and and the consolidation in violation of GAAP, as the Company never had a
majority ownership interest in CCT HK. Had Deloitte confirmed the
ownership by reviewing the records readily obtainable from the Hong Kong Companies Registry, it would have known that since 2003, the Company has
-4-
only owned only 49.25% of CCT HK, with 50% owned personally by Ron Chan, the Company's former CEO. According to the audited financial statements for the year ended December 31, 2009, in December 2009, the Company consummated and received proceeds from a secondary offering of its stock in the U.S. in the amount of $44 million. Despite the significance of the transaction to the Company, Deloitte failed to test the receipt and maintenance of the proceeds by the Company. In fact, at least $35 million of the proceeds were almost immediately wired out to entities outside of the Company. The loss of these proceeds was not reflected in the 2007 annual report or audited financial statements. Had
Deloitte reviewed the account statements from the banks, it would have seen
the majority of the offering proceeds had been immediately (and improperly) siphoned out of the Company.
According to the audited financial statements for the year ended December 31, 2010, on January 5, 2010, the Company issued 692,520 shares of stock at $7.22 per share for a total purchase price of $5 million to a British Virgin Islands company owned 100% by the Company's former CEO, Ron Chan. However, despite the fact that this transaction was a significant, related-party transaction at an above-market price, Deloitte failed to confirm that any of the Company's bank accounts ever actually received payment for the stock. In fact, the supposed transaction was a complete sham. The Company issued the shares, but never received payment.
According to the audited financial statements for the year ended December 31, 2010, on June 2, 2010, the Company entered into a stock purchase agreement with Wu Shi Xin, the purported sole stockholder of Wintown Enterprises Limited, pursuant to which Mr. Wu purchased 3,735,734 shares of the Company's common stock at $7.85 per share for a total purchase price of $29.3 million. However, again, despite the fact that this transaction was significant and at an above-market price, Deloitte failed to confirm that any of the Company's bank accounts ever actually received payment for the stock. In fact, this too was a sham transaction. The Company again issued shares without receiving payment. In each of 2008, 2009 and 2010, the Company's annual reports and audited financial statements reported the acquisition by the Company of a university. DTTC reported that in April 2008, one of the Company's subsidiaries completed the acquisition of an 80% interest in Hai Lai, which in turn holds, inter alia, the entire interest in FTBC, a private college affiliated with Chongqing Normal University. As reported in the audited financials, "the consideration for the acquisition was RMB480,000, of which RMB475,850 was paid during 2008..." In October 2009, another of the Company's subsidiaries acquired East Achieve, which indirectly holds the interest in a private college affiliated with Guangxi Normal University. As reported in the audited financials, "the total consideration for the acquisition is up to RMB365,000, of which RMB295,000 was paid during 2009..." (RMB in
-5-
thousands). In August 2010, another ofthe Company's subsidiaries acquired Wintown, which indirectly holds the entire interest in HIUBC, a private
college affiliated with Hubei Industrial University. As reported in the audited financials, "[t]he total consideration for the acquisition is up to RMB450,000, of which RMB360,000 was paid during 2010..." (RMB in thousands). According to the Company's current report on Form 8-K filed December 21, 2012, in the course of the Company's ongoing internal investigation, Deloitte previously informed Company management that according to its work papers,
the Company made payments in August and September 2010 from one of the
Company's bank accounts as part of the consideration for its acquisition of

Wintown. However, Deloitte failed to obtain from the bank and review the
actual statements for that account, which reflect no such payments during that time period. In fact, the Company apparently did not use its cash (or have the cash) to pay the consideration for any of these university acquisitions. On information and belief, the Company entered into financing agreements with
outside lenders to pay for the universities, which then were used as collateral
to secure the loans. When the Company stopped making payments on the
loans, the universities were effectively foreclosed, and their ownership

transferred outside of the Company.
6. Deloitte knew, or was reckless in not knowing, that the Company's financial statements were materially false and misleading. Deloitte failed to conduct any meaningful
audit; failing to independently confirm asset ownership, failing to confirm with the Company's
banks the statements of accounts and cash flows, failing to independently confirm with the banks
the existence of unencumbered term deposits that made up substantial percentages of the
Company's assets year-over-year, and failing to confirm with the banks the statements reflecting
the Company's actual receipt of stock sale proceeds. Yet for four years DTTC signed letters to
the Company's shareholders, assuring them that the audited financial statements ofthe Company
presented fairly, in all material respects, the financial position of the company at each year's end.
Deloitte's imprimatur on its supposedly vetted ChinaCast financial statements gave the Company
its ticket into the U.S. capital markets.
7. In making their decisions to invest in ChinaCast securities, Plaintiffs read, reviewed
and relied on ChinaCast's public filings with the SEC, including but not limited to its annual
-6-
reports on Form 10-KSB and 10-K, which included its audited year-end financial statements.
Plaintiffs trusted the Deloitte stamp of approval. Defendants knew that Plaintiffs purchased
ChinaCast securities in direct, eyeball reliance on, among other things, the Company's 10-Ks and
audited financial statements. They also knew that ChinaCast's stock was traded on the open
market in reliance on ChinaCast's public SEC filings that contained material misrepresentations
and omissions. The effect ofthese material misrepresentations and omissions, inter alia, was to:
(i) give Plaintiffs a materially false account of the Company's assets and liabilities; (ii) give
Plaintiffs false information about the ownership of the Company's most significant assets; (iii)
mislead Plaintiffs into believing that ChinaCast's CEO was investing his own money into
ChinaCast as new capital; (iv) mislead Plaintiffs into believing that another investor was infusing nearly $30 million of capital into the Company, at an above-market share price; and (iv) falsely
lead Plaintiffs to believe that ChinaCast was prudently managing its cash and other assets and
that there were reasonable internal controls in place at the Company. Had it not been for
Deloitte's imprimatur on the materially false and misleading statements and omissions contained
in ChinaCast's financial reports, Plaintiffs would not have purchased their ChinaCast shares, and
certainly not at the prices they paid.
8. ChinaCast's annual reports and financial statements on which Plaintiffs relied
contained numerous material misrepresentations and omissions that completely undermined

Plaintiffs' ability to make informed investment decisions about ChinaCast's securities. These
documents presented a picture of ChinaCast's assets and operations that was totally false. Had
Deloitte done even the most basic of audits, let alone complied with its own stated audit
procedures, Deloitte would have known in 2007 that the majority of the Company's supposed
assets did not exist. At any point in time, had Deloitte actually acted as the independent auditor
it held itself out to be, it would have known that ChinaCast was a house of cards. Instead,
Deloitte delivered the Company to the U.S. capital markets year, after year, after year, after year,
with the Deloitte "approved" seal on its financial statements. Plaintiffs relied on the accuracy of
those audited financial statements, and suffered tens of millions of dollars of losses as a result.
JURISDICTION AND VENUE
9. The claims asserted herein arise under and pursuant to Sections 10(b), 18 and 20(a) of
the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. 78j(b), 78r and 78t(a),
and Rule 10b-5 promulgated thereunder, 17 C.F.R. 240.10b-5.
10. This Court has jurisdiction over the subject matter of this action pursuant to Section
27 of the Exchange Act, 15 U.S.C. 78aa, and 28 U.S.C. 1331.
11. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28
U.S.C. 1391. Many of the acts giving rise to the violations complained of herein, including the dissemination of false and misleading information, occurred and had their primary effects in this
District.
12. In connection with the acts, transactions and conduct alleged herein, Defendants,
directly or indirectly, used the means and instrumentalities ofinterstate commerce, including, but
not limited to, the United States mails, interstate telephone communications and the facilities of a
national securities exchange and market.
PARTIES
A.
PLAINTIFFS
13. Plaintiff Special Situations Fund III QP, L.P. is an investment fund with an address
c/o 527 Madison Avenue, New York, New York, 10022. A list of its purchases of ChinaCast
common stock during the relevant period is attached hereto as Exhibit A.
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14. Plaintiff Special Situations Cayman Fund, L.P. is an investment fund with an address
c/o 527 Madison Avenue, New York, New York, 10022. A list of its purchases of ChinaCast
common stock during the relevant period is attached hereto as Exhibit B.
15. Plaintiff Fir Tree Value Master Fund, L.P is an investment fund with an address c/o
505 Fifth Avenue, New York, New York, 10017. A list of its purchases of ChinaCast common
stock during the relevant period is attached hereto as Exhibit C.
16. PlaintiffFir Tree Capital Opportunity Master Fund, L.P is an investment fund with an
address c/o 505 Fifth Avenue, New York, New York, 10017.
A list of its purchases of
ChinaCast common stock during the relevant period is attached hereto as Exhibit D.
17. Plaintiff Columbia Pacific Opportunity Fund, L.P. is an investment fund with an
address c/o 1910 Fairview Ave East, Seattle, Washington 98102. A list of its purchases of
ChinaCast common stock during the relevant period is attached hereto as Exhibit E.
18. Plaintiff Lake Union Capital Fund L.P. is an investment fund with an address c/o 601
Union Street, Seattle, Washington 98101. A list of its purchases of ChinaCast common stock
during the relevant period is attached hereto as Exhibit F. 19. Plaintiff Lake Union Capital TE Fund L.P. is an investment fund with an address c/o
601 Union Street, Seattle, Washington 98101. A list of its purchases of ChinaCast common
stock during the relevant period is attached hereto as Exhibit G.
20. Plaintiff Ashford Capital Management Inc. is an investment adviser with an address
of One Walkers Mill Road, Wilmington, DE 19807. A list of its purchases of ChinaCast
common stock during the relevant period is attached hereto as Exhibit H.
21. Plaintiff ZS EDU L.P. is an investment fund with an address c/o 1133 Avenue of the
Americas, New York, New York 10036. A list of its purchases of ChinaCast common stock
during the relevant period is attached hereto as Exhibit I.
22. Plaintiff MRMP-Managers LLC is an investment trust with an address c/o South
Dakota Trust Co., 201 South Philips Avenue, Suite 200, Sioux Falls, South Dakota 57104-6317.
A list of its purchases of ChinaCast common stock during the relevant period is attached hereto
as Exhibit J. B. DEFENDANTS
1.
Deloitte Touche Tohmatsu CPA Ltd.
23. Defendant Deloitte Touche Tohmatsu CPA Ltd. ("DTTC") is an auditing firm
located in the People's Republic of China ("PRC" or "China") with headquarters at 30/F Bund
Center, 222 Yan An Road East, Shanghai, China. DTTC is registered with the Public Company
Accounting Oversight Board ("PCAOB"). DTTC certified and signed ChinaCast's false and
misleading audited financial statements contained in the Company's 10-K filings for the years
ended December 31, 2007, 2008, 2009 and 2010.
2. Deloitte & Touche LLP
24. Defendant Deloitte & Touche LLP ("Deloitte US") is a Delaware limited liability
partnership located at 1633 Broadway, New York, New York. Deloitte US controlled the audit
of ChinaCast by DTTC, by virtue of the fact that one of Deloitte US's partners was designated as
the key audit team member to provide technical expertise and have ultimate responsibility for US
GAAP issues.
3.
Antonio Sena
25. Antonio Sena ("Sena") served as ChinaCast's Chief Financial Officer from 2004 to
2012, at which time he resigned. As CFO, Sena signed the Company's false and misleading
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annual reports on Form 10-K, including the 10-KSB for the year ended December 31, 2007, filed
March 31, 2008; the 10-K for the year ended December 31, 2008, filed March 16, 2009; the 10-
K for the year ended December 31, 2009, filed March 29, 2010; the 10-K for the year ended
December 31, 2010, filed March 16, 2011; the 10-K/A for the year ended December 31, 2010,
filed September 2, 2011; and the 10-K/A for the year ended December 31, 2010, filed February
24, 2012.
4. Justin Tang
26. Justin Tang ("Tang") Tang was the largest shareholder of ChinaCast's predecessor,
Great Wall Acquisition Corporation, and loaned hundreds of thousands of dollars to ChinaCast
in 2006 to allow it to complete its amendment of its certificate of incorporation and reverse
merger into the NASDAQ exchange. Tang served as a director of ChinaCast from February 9,
2007, to 2011, at which time he was defeated for re-election to the Board of Directors. As a director of ChinaCast, Tang signed the Company's false and misleading annual reports on Form
10-K, including the 10-KSB for the year ended December 31, 2007, filed March 31, 2008; the
10-K for the year ended December 31, 2008, filed March 16, 2009; the 10-K for the year ended
December 31, 2009, filed March 29, 2010; the 10-K/A for the year ended December 31, 2010,
filed September 2, 2011; the 10-K/A for the year ended December 31, 2010, filed September 2,
2011; and the 10-K/A for the year ended December 31, 2010, filed February 24, 2012.
5. Yin Jianping
27. Yin Jianping ("Yin") served as a director of ChinaCast from February 9, 2007, until
August 2009, at which time he resigned. As a director, Yin signed the Company's false and
misleading annual reports on Form 10-K, including the 10-KSB for the year ended December 31,
2007, filed March 31, 2008; and the 10-K for the year ended December 31, 2008, filed March 16,
2009.
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6.
Richard Xue
28. Richard Xue ("Xue") served as a director of ChinaCast from February 9, 2007, to
December 11, 2009, when he resigned. As a director, Xue signed the Company's false and
misleading annual reports on Form 10-K including the 10-KSB for the year ended December 31,
2007, filed March 31, 2008; and the 10-K for the year ended December 31, 2008, filed March 16,
2009.
7.
Michael Santos
29. Michael Santos ("Santos") served as a director of ChinaCast from August 2009 to
March 19, 2012, when he resigned. Santos also served as ChinaCast's executive director and
President International from 2001 to 2012. As a director, Santos signed the Company's false and
misleading annual reports on Form 10-K, including the 10-K for the year ended December 31,
2009, filed March 29, 2010; the 10-K for the year ended December 31, 2010, filed March 16, 2011; the 10-K/A for the year ended December 31, 2010, filed September 2, 2011; the 10-K/A
for the year ended December 31, 2010, filed September 2, 2011; and the 10-K/A for the year
ended December 31, 2010, filed February 24, 2012.
8.
John and Jane Does 1-10 and ABC Corps. 1-10
30. John and Jane Does 1-10 and ABC Corps. 1-10 are unknown individuals and/or
corporate entities that may have engaged in wrongdoing as against Plaintiffs with respect to this
matter whose identities are yet to be determined.
FACTUAL ALLEGATIONS
A.
CHINACAST
31. ChinaCast was formed as Great Wall Acquisition Corporation ("Great Wall") on
August 20, 2003. Great Wall was a Special Purpose Acquisition Company (also referred to as a
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"SPAC") that was created for the purpose of entering into amerger or other combination with a
business operating in the PRC and believed to have significant growth potential.
32. In 2006, Great Wall and Tang found their target acquisition in an e-learning company
called ChinaCast Communication Holdings Limited ("CCH"). CCH was then listed on the Stock
Exchange of Singapore ("SGX"), incorporated in Bermuda in 2003. Deloitte had been its auditor
since then.
33. In 2000, CCH identified demand for its education services in China. Because of
China's limited college and university resources compared to its fast-growing population of
university students, the PRC's Ministry of Education ("MOE") granted licenses to approximately
30 universities to conduct undergraduate and post-graduate courses by distance learning. CCH
facilitated such distance learning courses.
34. By the end of 2002, CCH signed agreements with 15 universities in the PRC and
offered satellite interactive distance learning options to over 50,000 students nationwide.
35. In July 2003, CCH raised additional funding to upgrade its satellite technology to the
Hughes Network Systems DirecWay satellite broadband network, and thereafter expanded its
distance learning business by signing additional K-12, IT and management training customers.
36. CCH's e-learning network and its position in the Chinese education market made it
an attractive target for Great Wall and Tang.
37. On December 22, 2006, Great Wall completed the acquisition of 51.22% of the
outstanding shares of CCH. After the acquisition of CCH, Great Wall changed its name to
ChinaCast Education Corporation. By the end of 2007, ChinaCast acquired 100% of CCH and
terminated the SGX listing - effecting a reverse merger onto the NASDAQ exchange.
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38. CCH's business was conducted via a series of subsidiaries. CCH's principal
subsidiary, ChinaCast Technology (BVI) Limited ("CCT BVI"), provided funding for its satellite
broadband Internet services through ChinaCast Company Ltd. ("CCL") - Beijing Branch
("CCLBJ") and ChinaCast Li Xiang Co. Ltd. ("CCLX") via various contract agreements. By
virtue ofthe acquisition, ChinaCast took control ofthe subsidiaries.
39. ChinaCast began acquiring bricks and mortar colleges and universities, to expand its
business. In 2008, the Company acquired its first university, Foreign Trade Business College of
Chongqing Normal University ("FTBC").
40. Thereafter, the Company organized itself into two distinct business segments, the E-
learning and training service group (the "ELG"), encompassing the Company's distance learning
business before the acquisition, and the Traditional University Group (the "TUG"), offering
bachelor and diploma programs to students in China.
41. On October 5, 2009, the Company completed the acquisition ofEast Achieve Limited
("East Achieve"), the holding company which beneficially owns 100% of Lijiang College of
Guangxi Normal University ("Lijiang" or "LJC"). LJC is an independent, for profit, private
university affiliated with Guangxi Normal University.
42. ChinaCast added a third bricks and mortar property on August 23, 2010, when it
completed the acquisition of Wintown Enterprises Limited ("Wintown"), the holding company
which beneficially owns 100% of Hubei Industrial University Business College ("HIUBC").
B. DELOITTE'S ROLE AS CHINACAST'S AUDITOR
43. Deloitte holds itself out as a global accounting firm that provides integrated cross-
border audits coordinated among member and network firms. Defendant DTTC served as the
Company's independent public auditor of record between 2007 and 2010, lending the perceived prestige and credibility of the global Deloitte brand to ChinaCast's financial statements. Deloitte
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was complicit in the Company's fraud by certifying the Company's false financial statements
while knowingly or recklessly ignoring evidence of suspicious transactions, remaining willfully

blind in the face of evidence of fraud, and failing to perform even the most basic review of
transactions that it was purportedly "auditing."
44. Deloitte represented that it had performed its audits in accordance with the standards
of the PCAOB and that, in its opinion, "the consolidated financial statements present fairly, in all
material respects, the financial position of the Company ... and the results of its operations and
its cash flows ... in conformity with accounting principles generally accepted in the United
States ofAmerica." As detailed below, these statements were materially false and misleading because Deloitte knew or recklessly ignored red flags indicating that ChinaCast's financial
statements for fiscal years 2007 through 2010 were materially misstated and were not presented
in conformity with GAAP.
C.
DEFENDANTS' FALSE AND MISLEADING STATEMENTS
1.
ChinaCast's Annual Report for the Year Ended December 31, 2007
45. In 2007, ChinaCast provided educational services primarily over broadband satellite
and did not own any brick and mortar universities. The primary assets of the Company were its
bank account balances, which largely consisted of term deposits.
46. Deloitte issued unqualified audit opinions that ChinaCast's consolidated financial
statements for 2007 were prepared in accordance with "accounting principles generally accepted
in the United States ofAmerica" and that Deloitte had conducted its audit in accordance with the
standards ofthe PCAOB. 2007 10-K at F-2. Plaintiffs specifically read, reviewed, and relied on
these statements in purchasing ChinaCast securities.
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47. ChinaCast's annual report on Form 10-K for the year ended December 31, 2007, filed with the SEC on March 31, 2008 on Form 10-KSB (the "2007 10-K") was materially false and
misleading.
(a)
ChinaCast's Falsely Reported Ownership ofCCT HK
48. The Company's audited financial statements included in the 2007 10-K represented
that ChinaCast Technology (HK) Limited ("CCT HK"), a Hong Kong subsidiary of the
Company, was 98.50% owned by the Company. With Deloitte's approval, CCT HK's results
were consolidated with the Company's financial results. Plaintiffs specifically read, reviewed,
and relied on these representations inpurchasing securities of ChinaCast.
49. By certifying that the Company's financial statements complied with GAAP, Deloitte
was confirming that the Company's subsidiaries, including CCT HK, were properly consolidated
in accordance with GAAP. Under GAAP, consolidation is proper when a parent corporation
exercises operational control over and owns a majority of the voting interests of a subsidiary. Thus, to support its opinion that the consolidation of CCT HK was proper, at a minimum Deloitte was required to confirm that the Company owned a majority of the voting interests of
CCT HK.
50. In fact, the Company never owned a majority ofthe voting interests ofCCT HK, and
consolidation of CCT HK was not permissible. Indeed, records readily obtainable by Deloitte
from the Hong Kong Companies Registry confirm that Ron Chan, the Company's former CEO,
has personally owned 50% ofCCT HK at all times since 2003.
51. Deloitte permitted the consolidation of CCT HK, all the while knowing, or recklessly
not knowing, that the Company did not own a majority ofCCT HK's voting interests.
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(b)
ChinaCast's Falsely Reported Term Deposits
52. The largest assets on ChinaCast's balance sheet were "term deposits." As disclosed
in
the 10-K, "Term deposits consist of deposits placed with financial institutions with remaining
maturities of greater than three months but less than one year when purchased." 2007 Form 10KatF-13.
53. For the fiscal year ended December 31, 2007, term deposits comprised over eighty percent ofChinaCast's total bank balances, as shown in the following table:
RMB (in thousands) 596,768
138,610 735,378
81%
Term Deposits
Cash and Cash Equivalents
Total Bank Balances
U.S. Dollars (in thousands) 81,749

18,988
100,737
81%
Term Deposits as a Percentage of

Total Bank Balances
2007 Form 10-K at F-3.
54. Significantly, the 2007 10-K represented that all of the Company's assets, including term deposits, were not pledged to guarantee the payment obligations of any third parties. Specifically, the 2007 10-K represented that the Company 'has not entered any financial guarantees or other commitments to guarantee the payment obligations ofany third parties."
2007 Form 10-K at 25. Plaintiffs specifically read, reviewed, and relied on these representations
in purchasing securities of ChinaCast.
55. These representations regarding term deposits and the absence of financial guarantees
were blatantly false.
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56. As of December 31, 2007, at least 76% of the Company's term deposits were
pledged to guarantee the debts ofthird parties {i.e., at least RMB 455,310,000 were pledged out
ofthe RMB 596,768,000 total). None ofthese pledges were disclosed.
57. The pledged term deposits could not be transferred, spent, or used as collateral to
secure the Company's borrowings. Thus, cash balances that Deloitte certified as the single
largest "asset" on the Company's balance sheet were illusory.
58. The existence of the pledge agreements would have been immediately apparent to
Deloitte had it performed the most basic audit procedures, such as reviewing the actual instruments governing the term deposits. Deloitte signed off on the Company's term deposit
balances either knowing that the pledge agreements were not disclosed or recklessly failing to
perform any actual audit ofthe term deposits.
2. ChinaCast's Annual Report for the Year Ended December 31, 2008
59. In 2008, the company's primary business continued to be the provision of
educational services primarily over broadband satellite. As in 2007, the primary assets of the
Company were its bank account balances, which largely consisted of term deposits.
in the United States ofAmerica" and that Deloitte had conducted its audit in accordance with the
standards of the PCAOB. 2008 10-K at F-2. Deloitte also issued an unqualified opinion as to
the Company's internal controls over financial reporting. Plaintiffs specifically read, reviewed,
and relied on these statements in purchasing ChinaCast securities.
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61. ChinaCast's annual report on Form 10-K for the year ended December 31, 2008, filed
with the SEC on March 16, 2009 on Form 10-K (the "2008 10-K") was materially false and
misleading.
(a)
ChinaCast's Falsely Reported Ownership ofCCT HK
62. As in its 2007 10-K, the Company's audited financial statements included in its 2008
10-K represented that CCT HK was 98.50% owned by the Company. With Deloitte's approval,
CCT HK's results were again consolidated with the Company's financial results. Plaintiffs
specifically read, reviewed, and relied on these representations in purchasing securities of

ChinaCast.
63. The Company's financial statements as presented in its 2008 10-K were not presented
in accordance with GAAP, because they improperly consolidated CCT HK as a subsidiary of
ChinaCast when the company in fact did not own a majority ofthe voting interests ofCCT HK.
Records readily obtainable from the Hong Kong Companies Registry confirm that Ron Chan, the Company's former CEO, has personally owned 50% of CCT HK at all times since 2003.
(b) ChinaCast's Falsely Reported Term Deposits
64. For the fiscal year ended December 31, 2008, term deposits comprised over 60% of
ChinaCast's total bank balances, as shown in the following table:
RMB (in thousands) 369,000
220,131
589,131
63%
Term Deposits
U.S. Dollars (in thousands) 32,372

54,265
86,637
63%
Cash and Cash Equivalents

Total Bank Balances
Term Deposits as a Percentage of

Total Bank Balances
2008 Form 10-KatF-3.
19-
65. Significantly, the 2008 10-K represented that all of the Company's assets, including
term deposits, were not pledged to guarantee the payment obligations of any third parties.
Specifically, the 2008 10-K represented that the Company "has not entered any financial guarantees or other commitments to guarantee the payment obligations of any third parties."
2008 Form 10-K at 27. Plaintiffs specifically read, reviewed, and relied on these representations
in purchasing securities of ChinaCast.
66. As of December 31, 2008, at least 95% of the Company's term deposits were
pledged to guarantee the debts ofthird parties {i.e., at least RMB 349 million were pledged out
ofthe RMB 369 million total). None ofthese pledges were disclosed.
67. The pledged term deposits could not be transferred, spent, or used as collateral to
secure the Company's borrowings. Indeed, certain of the pledged term deposits ultimately were
foreclosed by banks to whom the term deposits were pledged, after defaults occurred on the
underlying debt obligations. Thus, the cash balances that Deloitte certified were false.
(c) ChinaCast's Falsely Reported Acquisition ofHai Lai
68. On or about April 11, 2008, the Company announced that its wholly owned
subsidiary Yu Pei Information Technology (Shanghai) Limited ("YPIT") acquired an 80%

interest in Hai Lai Education Technology Limited, which, in turn, owned the Foreign Trade and
Business College ("FTBC") ofChongqing Normal University.
69. Deloitte's audited financial statements reported that "[f]he consideration for the
acquisition was RMB480,000, of which RMB475,850 was paid during 2008." (RMB in
thousands). 2008 10-K at F-24.
70. This purported RMB 475,850,000 payment also was reflected in the Company's cash
flow statements contained in its 2008 10-K that were certified by Deloitte. In fact, by far the
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largest single line item on the cash flow statement was the purported payment of RMB
465,507,000 for "Purchase of subsidiaries, net of cash acquired." 2008 10-K at F-7.
71. Plaintiffs specifically read, reviewed, and relied on these representations in

purchasing securities of ChinaCast.
72. These representations were false. The Company's bank statements and accounts do
not contain any evidence of any payment made in 2008 related to the acquisition of FTBC. In
other words, Deloitte certified the largest payment on the Company's cashflow statements for
2008, while knowingly or recklessly ignoring the fact that there was no evidence of any such
payment.
73. In light of all of the misstatements in the 2008 10-K, material weaknesses existed in the Company's internal controls over financial reporting. Nonetheless, in the 2008 10-K Deloitte
recklessly issued an unqualified opinion on the Company's internal controls over financial
reporting.
CHINACAST'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER31, 2009
74. In 2009, ChinaCast provided educational services over broadband satellite and
through two brick and mortar universities, FTBC and East Achieve. The primary assets of the
Company were its two universities and its bank account balances, which largely consisted of
term deposits.
in the United States ofAmerica" and that Deloitte had conducted its audit in accordance with the standards of the PCAOB. 2009 10-K at F-2. Deloitte also issued an unqualified opinion as to
the Company's internal controls over financial reporting. Plaintiffs specifically read, reviewed,
and relied on these statements in purchasing ChinaCast securities.
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with the SEC on March 29, 2010, (the "2009 10-K") was materially false and misleading. (a) ChinaCast's Falsely Reported Ownership ofCCT HK
77. As in its 2007 and 2008 10-Ks, the Company's audited financial statements included
in its 2009 10-K represented that CCT HK was 98.50% owned by the Company. With Deloitte's
approval, CCT HK's results were again consolidated with the Company's financial results.
Plaintiffs specifically read, reviewed, and relied on these representations in purchasing securities
of ChinaCast. Plaintiffs specifically read, reviewed, and relied on these representations in
ChinaCast when the company in fact did not own a majority ofthe voting interests ofCCT HK.
Records readily obtainable by Deloitte from the Hong Kong Companies Registry confirm that
Ron Chan, the Company's former CEO, has personally owned 50% of CCT HK at all times
since 2003.
(b)
False Reporting of 2009 East Achieve Acquisition
79. On or about October 5, 2009, the Company completed the acquisition of East
Achieve Limited ("East Achieve"), the holding company which beneficially owned 100% of
Lijiang College. In its 2009 annual report, the Company disclosed that the total consideration
was up to RMB 365 million, of which RMB 295 million was paid during 2009. 2009 Form 10-K
at 2, F-29.
80. This purported RMB 295 million payment (which is approximately US$44 million)
was also reflected in the Company's cash flow statements contained in its 2009 10-K that were
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certified by Deloitte. In fact, by far the largest single line item on the cash flow statement was
the purported payment of RMB 222 million for "Purchase of subsidiaries, net of cash acquired."
2009 10-K at F-8.

82. These representations were false. The Company's bank statements and accounts
contain no evidence ofany payment in 2009 related to the acquisition ofEast Achieve. In other words, Deloitte certified that the Company paid $44 million in connection with one ofthe most
significant transactions of2009, while knowingly or recklessly ignoring the fact that there was
no evidence of any such payment.
(c)
Undisclosed Loans Related to the East Achieve Acquisition
83. Deloitte also recklessly failed to detect massive undisclosed loans that the Company
used to fund its East Achieve acquisition in 2009.
Indeed, given the illusory nature of the
Company's cash, massive loans were necessary to give the Company a false appearance of
solvency.
84. The existence of these loans would have been obvious to Deloitte had it bothered to
audit the bank accounts of the Company subsidiaries that owned the East Achieve college, in
which numerous transactions related to these undisclosed loans occurred. Indeed, these bank
accounts reflect hundreds of daily deposits and payments unrelated to the billing and collection
cycle of the college's business.
85. Deloitte was either willfully blind to the loan transactions occurring in the East
Achieve accounts or recklessly failed to perform an audit of these accounts, such as by
examining account histories or even sampling select transactions. Had Deloitte performed even
-23-
minimal audit procedures, it would have discovered a substantial number of transactions with
unrelated third parties.
86. In sum, as aresult of Deloitte's reckless failure to audit the Company's East Achieve
bank accounts, massive liabilities were not disclosed and the Company's balance sheets for 2009
and 2010 contained material misstatements.
(d)
False Reporting ofDecember 2009 Share Offering
87. Deloitte's colossal audit failures enabled former CEO Ron Chan's brazen looting of
the proceeds from the December 2009 sale of Company stock to Roth Capital Partners, LLC.
88. As Deloitte knew, approximately $35 million in proceeds of the December 2009
offering were wired to CCT HK's bank account in Hong Kong. Deloitte recklessly ignored the
massive risks presented by the transfer of tens of millions of dollars in cash - the largest asset in
the Company - to an entity that was 50% owned by the Mr. Chan. Deloitte recklessly failed to
scrutinize the basis for this transfer or conduct any audit of the transfer whatsoever, and recklessly failed to take any steps to ensure the safety ofthe cash.
89. Right under Deloitte's nose, immediately after the share proceeds were transferred to
CCT HK, in December 2009 Mr. Chan diverted $35 million in cash from CCT HK to third
parties outside of the Company.
90. Deloitte recklessly failed to perform any audit ofthe transfer of $35 million out of
CCT HK (which occurred in one transfer of $30 million and another transfer of $5 million),
despite the fact that these transfers were made from aCCT HK bank account that had the largest
cash balance in the Company in 2009. Deloitte recklessly failed to audit the largest cash
transfers of the year, which stripped the Company of its cash.
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91. As a direct result ofDeloitte's audit failures, the company's balance sheet and cash
flow statements contained material misstatements.
92. In light of all of the misstatements in the 2009 10-K, material weaknesses existed in
the Company's internal controls over financial reporting. Nonetheless, in the 2009 10-K Deloitte
recklessly issued an unqualified opinion on the Company's internal controls over financial
reporting.
CHINACAST'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2010
93. In 2010, ChinaCast provided educational services over broadband satellite and
through three brick and mortar universities, FTBC, East Achieve, and Wintown. The primary
assets ofthe Company were its three universities and its bank account balances, which largely
consisted of term deposits.
inthe United States of America" and that Deloitte had conducted its audit in accordance with the
standards of the PCAOB. 2010 10-K at F-2. Plaintiffs specifically read, reviewed, and relied on
these statements in purchasing ChinaCast securities.
with the SEC on March 16, 2011 (as amended on September 2, 2011, February 8, 2012, and
February 24, 2012; the "2010 10-K") was materially false and misleading.
(a) ChinaCast's Falsely Reported Ownership of CCT HK
96. As in its 2007, 2008, and 2009 10-Ks, the Company's audited financial statements
included in its 2010 10-K represented that CCT HK was 98.50% owned by the Company. With
Deloitte's approval, CCT HK's results were again consolidated with the Company's financial
-25-
results. Plaintiffs specifically read, reviewed, and relied on these representations in purchasing
securities of ChinaCast.
ChinaCast when the company in fact did not own amajority of the voting interests of CCT HK.
Records readily obtainable by Deloitte from the Hong Kong Companies Registry confirm that
Ron Chan, the Company's former CEO, has personally owned 50% of CCT HK at all times
since 2003.
(b)
ChinaCast's Falsely Reported June 2010 Private Share Offering
98. According to the 2010 10-K, on or about June 2, 2010, the Company sold
approximately 3.7 million shares to an individual named Wu Shi Xin "for atotal purchase price
of US $29.3 million." 2010 10-K at F-42.
99. This purported $29.3 million payment was reflected in the Company's cash flow
statements contained in its 2010 financial statements as certified by Deloitte. The cash flow
statements reflect that approximately $35 million was received by the Company in proceeds
from share offerings, which included the $29.3 million purportedly raised in the June 2010
offering from Wu Shi Xin (and $5 million raised from Thriving Blue Limited in a separate
offering in January 2010).

101. These representations regarding the receipt of $29.3 million from the June 2010
offering were false. The Company's bank statements and accounts do not contain any evidence
of the receipt of any such offering proceeds.
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102. Deloitte failed to conduct even the most perfunctory audit to confirm the receipt
of the $29.3 million in offering proceeds. Rather, Deloitte certified the receipt of $29 million in
share offering proceeds, while knowingly or recklessly ignoring the fact that there was no
evidence of any such payment.
(c)
ChinaCast's Falsely Reported August 2010 Wintown Acquisition
103. On or about August 23, 2010, the Company completed the acquisition of
Wintown Enterprises Limited ("Wintown"), aholding company that beneficially owned 100% of
Hubei Industrial University Business College. In its 2010 annual report, the Company disclosed
that "[t]he total consideration is up to RMB450 million, of which RMB360 million was paid
during 2010." 2010 Form 10-K at F-31.
104. This purported RMB 360 million payment (which is approximately US$54 million) was also reflected in the Company's cash flow statements contained in its 2010 10-K
that were certified by Deloitte. In fact, by far the largest single line item on the cash flow
statement was the purported payment of RMB 340 million for "Purchase of subsidiaries, net of
cash acquired." 2010 10-Kat F-8.

106.
These representations were false. The Company's bank statements and accounts
do not contain any evidence of any payment made in 2010 related to the acquisition of Wintown.
In other words, Deloitte certified the largest payment on the Company's cashflow statements
for 2010, while knowingly or recklessly ignoring the fact that there was no evidence of any
such payment.
-27-
(d)
Undisclosed Loans Related to the Wintown Acquisition
107. Deloitte recklessly failed to detect massive undisclosed loans that the Company
used to fund its Wintown acquisition in 2010.
Given the looting of the Company's cash,
massive loans were necessary to give the Company a false appearance ofsolvency.
108. The existence of these loans would have been obvious to Deloitte had it audited
the bank accounts of the Company subsidiaries that owned the Wintown college, in which
numerous transactions related to these undisclosed loans occurred. Indeed, these bank accounts
reflect hundreds of daily deposits and payments unrelated to the billing and collection cycle of
the college's business.
109.
Deloitte was either willfully blind to the loan transactions occurring in the
Wintown accounts or recklessly failed to perform an audit of these accounts, such as by
examining account histories or even sampling select transactions. Had Deloitte performed even
minimal audit procedures, it would have discovered a substantial number of transactions with
unrelated third parties.
110.
In sum, as a result ofDeloitte's reckless failure to audit the Company's Wintown
bank accounts, massive liabilities were not disclosed and the Company's balance sheets for 2010
contained material misstatements.
(e)
Falsely Reported Cash Balances
111. As part of its audit of the Company's financial statements, Deloitte was required
to confirm the Company's balances of cash and cash equivalents as represented by management.
Deloitte was required to exercise professional skepticism regarding management's

representations, particularly given the risk of fraud in the Chinese market.
-28-
112. As Deloitte knew, in order to prevent fraud, the best practice in China is for
auditors to physically visit banks and directly observe the printing of bank statements by bank personnel. Deloitte recklessly failed to follow this procedure on numerous occasions, often
relying on mailed confirmations that it knew were subject to the risk of interception.
113. As a direct result of Deloitte's reckless audit failures, the Company's cash balances were misstated. Current management has investigated the Company's December 31,
2010 cash balances using on-site cash confirmation procedures that Deloitte was required (but
failed) to follow. Based on management's investigation to date, the Company's cash and cash equivalents as of December 31, 2010 were at least $9 million less than reported in the 2010 10-K
certified by Deloitte.
D.
DELOITTE KNOWINGLY OR RECKLESSLY FAILED TO COMPLY

WITH ACCOUNTING STANDARDS
114. Despite knowingly or recklessly ignoring red flags and failing to perform even the
most basic audit procedures, Deloitte issued opinions regarding ChinaCast's financial statements
representing that it had conducted its audits in accordance with PCAOB standards. In fact,
Deloitte recklessly failed to conduct even the most basic audit procedures and blatantly violated
numerous accounting standards.
115.
For each of the fiscal years ending December 31, 2007, through December 31,
2010, Deloitte issued unqualified audit opinions that ChinaCast's consolidated financial statements were prepared in accordance with "accounting principles generally accepted in the
United States of America" ("GAAP"). Deloitte's opinions also stated that it had conducted its
audits in accordance with the standards ofthe PCAOB. For fiscal years 2008 and 2009, Deloitte
also issued unqualified opinions on the Company's internal controls over financial reporting.
-29-
116. PCAOB standards include generally accepted accounting standards ("GAAS"),
which are authoritative standards that auditors must comply with when they conduct audits and reviews. Deloitte was required to perform its annual audits and quarterly reviews of financial
information in accordance with GAAS, which include ten basic standards known as "Statements
on Auditing Standards" that are codified and referred to as "AU." These include the following
standards, all ofwhich were knowingly or recklessly violated by Deloitte:
"The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether caused by error or fraud." AU 110.2.
"Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit." AU 150.02.
"Due professional care requires the auditor to exercise professional skepticism.

critical assessment of audit evidence." AU 230.07.
Professional skepticism is an attitude that includes a questioning mind and a
"The auditor's assessment of the risks of material misstatement due to fraud
should be ongoing throughout the audit. Conditions may be identified during fieldwork that change or support ajudgment regarding the assessment ofthe risks, such as .. . [discrepancies in the accounting records, including . . . [unsupported
or unauthorized balances or transactions." AU 316.68.
"During the performance of confirmation procedures, the auditor should maintain

control over the confirmation requests and responses. Maintaining control means
establishing direct communication between the intended recipient and the auditor to minimize the possibility that the results will be biased because ofinterception
and alteration ofthe confirmation requests or responses." AU 330.28.
"The independent auditor's direct personal knowledge, obtained through physical

examination, observation, computation, and inspection, is more persuasive than information obtained indirectly." AU 326.21(c). Representations from
statements under audit." AU 333.02
management "are not a substitute for the application of those auditing procedures necessary to afford a reasonable basis for an opinion regarding the financial
"The books of original entry, the general and subsidiary ledgers, related accounting manuals, and records such as work sheets and spreadsheets supporting cost allocations, computations, and reconciliations all constitute evidence in
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support of the financial statements." "[Wjithout adequate attention to the

financial statements would not be warranted." AU 326.16.
proprietary and accuracy of the underlying accounting data, an opinion on
117. PCAOB standards also include GAAP, which are principles recognized by the
accounting profession as the conventions, rules and procedures necessary to define accepted
accounting practices at a particular time. Pursuant to SEC Regulation S-X (17 C.F.R. and
210.4(a)(l)), financial statements filed with the SEC that are not prepared in compliance with
GAAP are presumed to be misleading and inaccurate.
118. Deloitte knowingly or recklessly certified the Company's financial results and statements that were prepared in violation of GAAP and that misstated, inter alia, the
Company's revenues, net income, cash balances, and term deposits.
119. Deloitte violated the following fundamental GAAP principles, among others:
The principle that financial reporting should be reliable in that it represents what
itpurports to represent (FASB Statement Concepts No. 2, 58-59); The principle that a company's financial statements must be reliable, transparent, truthful, and accurately reflect the financial performance ofthe company (FASB
Statement Concepts No. 2)
The principle of completeness, which means that nothing is left out of the
information that may be necessary to ensure that it validly represents underlying
events and conditions (FASB Statement of Concepts No. 2, 79);
The principle that conservatism be used as a prudent reaction to uncertainty to try

to ensure that uncertainties and risks inherent in business situations are adequately considered (FASB Statement of Concepts No. 2, 95, 97);
The principle that companies must accurately present the financial results of the corporation's operations, and to disclose net income as a reflection of all items of
profit and loss recognized during the period (APB Opinion No. 9)
The principle that companies must accurately state the income received by the corporation in a reported period, according to standards for the reporting of comprehensive income and its components in a full set of general-purpose
financial statements (FASB Statement No. 130).
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The principle that revenue recognized by a corporation in its financial statements must accurately reflect the business operations ofthe company. (FASB Statement
of Concepts No. 5).
1.
Deloitte Failed To Obtain Reasonable Assurance That ChinaCast's

Financial Statements Were Free From Material Misstatement
120.
PCAOB standards required Deloitte to assess the risk of fraud and to thoroughly
investigate any red flags that suggested the risk of fraud. Deloitte violated these standards by
knowingly or recklessly ignoring red flags at ChinaCast and by failing to obtain even the most
perfunctory audit evidence to support the existence of critical balances or transactions reflected
in the Company's financial statements.
121.
For example, Deloitte ignored the massive red flag presented by the fact that the
proceeds of the Company's December 2009 share offering were wired to a Hong Kong
subsidiary that was not majority-owned by the Company. As part of its obligation to assess the
risk of fraud (and to audit the Company's internal controls over financial reporting), Deloitte was
required to audit the transaction (which represented the largest transaction of the year) and to
express professional skepticism regarding any suspicious aspects of the transaction. Yet Deloitte
recklessly failed to conduct any audit at all, simply accepting management's representation that
the offering proceeds were deposited in aHong Kong subsidiary, when in fact the proceeds were
immediately looted.
122.
To take another example, Deloitte ignored hundreds of transactions unrelated to
university billing and collection that were recorded in bank accounts used by the Company's
Wintown and East Achieve colleges. Had Deloitte reiewed these numerous unusual transactions,
it would have discovered that the transactions related to massive undisclosed loans that the
Company was using to fund its acquisitions.
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2.
Deloitte Failed To Obtain Sufficient Audit Evidence To Support Its

Opinions
123. PCAOB standards required Deloitte to obtain "[sufficient competent evidential
matter ... to afford a reasonable basis for an opinion regarding the financial statements under
audit." AU 150.02. Deloitte violated this standard by knowingly or recklessly failing to obtain any audit evidence to support critical representations in the Company's financial statements.
Deloitte also failed to obtain sufficient audit evidence to support its 2008 and 2009 unqualified
opinions regarding the Company's internal controls, which (contrary to Deloitte's baseless
opinion) contained material weaknesses that enabled the massive looting of the Company's
assets and other fraudulent conduct.
124. For example, Deloitte recklessly certified that the Company made an RMB
475,850,000 payment in connection with its April 2008 acquisition of FTBC. Yet Deloitte could
not (and did not) obtain sufficient audit evidence of any such payment, because no such payment
was ever made.
125.
Further, Deloitte recklessly certified that the Company made an RMB 295 million
payment in connection with its October 2009 acquistion of East Achieve. Yet Deloitte could not
(and did not) obtain sufficient audit evidence of any such payment, because no such payment
was ever made.
126.
Further, Deloitte recklessly certified that the Company made an RMB 360 million
payment in connection with its August 2010 acquistion of Winton. Yet Deloitte could not (and
did not) obtain sufficient audit evidence ofany such payment, because no such payment was ever
made.
127.
To take another example, Deloitte recklessly failed to obtain sufficient audit
evidence to support the representation that the Company "has not entered any financial
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guarantees or other commitments to guarantee the payment obligations of any third parties."
Deloitte could not (and did not) obtain sufficient audit evidence to support this representation,
because an examination ofthe term deposit instruments or bank statements would have revealed
that the majority of the Company's term deposits were pledged to third parties and were thus
inaccessible to the Company.
3.
Deloitte Failed To Confirm ChinaCast's Account Balances
128.
PCAOB standards required Deloitte to confirm the Company's bank account
balances and to maintain control over bank confirmation requests and responses by "establishing
direct communication between the intended recipient and the auditor to minimize the possibility
that the results will be biased because of interception and alteration of the confirmation requests
or responses." AU 330.28. These procedures are particularly important in China, in which the
risk of fraud is pervasive.
129.
As Deloitte knew, in order to prevent fraud, the best practice in China is for
auditors to physically visit banks and directly observe the printing of bank statements by bank
personnel. Deloitte either failed to perform any confirmation procedures or recklessly failed to
follow the correct confirmation procedures. Indeed, Deloitte often relied on mailed
confirmations that it knew were subject to the risk of interception.
130. For example, Deloitte recklessly failed to obtain any confirmation that the
Company possessed unrestricted term deposit balances. Had Deloitte obtained confirmations, it
would have discovered that most ofthe term deposits were pledged and were thus inaccessible to
the Company.
131.
To take another example, Deloitte recklessly failed to obtain confirmation that the
Company retained the proceeds of the December 2009 share issuance. Had Deloitte obtained
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such confirmations, it would have discovered that $35 million in offering proceeds were looted
from CCH HK almost immediately after they were received.
132. To take yet another example, Deloitte recklessly failed to obtain sufficient audit
evidence to support its certification of the Company's receipt of $29.3 million in proceeds from
its June 2010 share offering. Deloitte failed to conduct even the most perfunctory audit to confirm the receipt of the offering proceeds, and there is no evidence that the Company ever
received any portion of these proceeds.
E. THE TRUTH EMERGES / LOSS CAUSATION
133. In January 2012, the Company's shares traded at a price well over $6.00 per share. As the truth emerged regarding the Company's financial condition and Defendants' fraud,
the Company's stock price declined dramatically. 134. On March 26, 2012, the Company announced that "Ron Chan Tze Ngon was
removed from his position as Chief Executive Officer of the Company by the Company's board
of directors."
135. On April 2, 2012, the Board of Directors sent an open letter to shareholders,
stating that "we have uncovered questionable activities and transactions" by Ron Chan and his
accomplices. Trading in ChinaCast's stock was halted on the same day, with the stock closing at
$4.24.
136.
Two weeks later, on April 17, 2012, the Company announced that effective April
11, "Jim Ma was removed from his position as Chief Accounting Officer of the Company by the
Company's board of directors."
137. On April 19, 2012, having already announced that "questionable activities" had
been discovered, the Company detailed its findings up to that point. The Company announced a
series of issues it was still investigating, including:
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The unauthorized transfer of subsidiaries holding interests in two of the Company's

unauthorized persons outside of the Company group structure.
colleges, Lijiang College and Hubei International University Business College, to

to establish and operate education-related companies outside of the Company's group
structure;
Possible undisclosed related party transactions involving the use of Company assets
Possible undisclosed loans to third parties secured by Company assets and without the
board's knowledge
138. On May 14, 2012, the Company announced further investigations, including into
the "withdrawal of over Rmb760 million (approximately US$120 million) in cash from the bank
accounts of CCT Shanghai and YPSH from July 2011 through April 2012 without the prior
knowledge ofthe Company's Board of Directors."
139.
In June and July 2012 filings, the Company further acknowledged that it
suspected that two of its private colleges had been transferred, without authorization, to third
parties.
140.
On June 25, 2012, trading in ChinaCast re-opened. As a result ofthe disclosures
that were made during the time that trading was halted, the Company's stock price declined
precipitously, closing at 82 cents on June 25.
141. On July 30, 2012, the Company provided more detail on its "findings to date" in connection with its previously announced internal investigation, including of the financial
statements. Included in its detailed findings were that "certain subsidiaries of the Company
pledged atotal of approximately US$37 million in cash deposits on separate occasions to secure
bank borrowings by unrelated parties." The Company also disclosed that it was involved in
litigation in the PRC related to loan guarantees to "Wu Caiyu, an unidentified third party."
142. On December 21, 2012, the Company provided further details ofits investigation,
and instructed investors to no longer rely on the Company's audited financials for 2009 and
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2010. The Company stated that its internal investigation had uncovered the specifics of a
number of problems. These included the following:
"Non-bank borrowings. Although the Company's investigation is still ongoing, based on the continuing investigation, it appears likely that other borrowings as of various dates from the fourth quarter of 2009 (and possibly earlier) to the third quarter of 2011 were understated in the Previously Issued Financial Statements.
Specifically, management believes, based on recent discoveries, that from the fourth quarter of 2009 (and possibly earlier) until the second quarter of 2012, the Company under Prior Management had taken out a series of short-term, highinterest rate loans from a number of family members, friends and related
companies of Prior Management, as well as various unrelated companies, without the knowledge or consent of the Company. While the Company to date has only
been able to obtain bank record and legal documentation evidence to corroborate some of these undisclosed borrowings, management believes, based on recent discoveries, that the total amount of such borrowings from the fourth quarter of
2009 to the fourth quarter of 2011 could be over Rmb900 million. Management has
not been able to determine the number and amount of loans that remain
outstanding, but claims against the Company have been filed by individuals for non-repayment of debts that were not disclosed in the Previously Issued Financial
Statements."
"Interest in a purported majority-owned subsidiary. The Company has recently

learned that records obtained from the Hong Kong Companies Registry reflect that
ChinaCast Technology (HK) Limited ("CCT HK"), which according to the Previously Issued Financial Statements (and other public filings since 2007) is wholly-owned by Company subsidiary ChinaCast Technology (BVI) Limited ("CCT BVI"), is actually owned only as to 50% by CCT BVI, with Mr. Chan owning the remaining 50%. The Company continues to investigate how Mr. Chan
came to hold this ownership stake without the Board's knowledge or consent. As
the Company only owns approximately 98.4% of CCT BVI, the Company effectively holds only an approximately 49.2% indirect equity interest in CCT HK.
As such, CCT HK should not have been consolidated as a majority-owned subsidiary in the Previously Issued Financial Statements."
"December 2009 stock offering proceeds. The Company has now discovered that
Prior Management had transferred a substantial portion (at least US$35 million) of
the US$44 million proceeds (net of underwriting discount) from the Company's December 2009 public common stock offering to entities outside of the Company's
group structure without the knowledge or consent of the Board. These cash
outflows, made shortly after the offering's completion, have not been disclosed in
any of the Previously Issued Financial Statements. "
"2009 year-end term deposits. The Company has recently learned that at least
Rmb250 million (US$36 million) of the Rmb507 million (US$75 million) amount that was classified as term deposits on the Company's balance sheet as of
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December 31, 2009, was actually pledged by Prior Management to guarantee the debts of various third parties - many of whom appear to operate outside of the
Company's scope ofbusiness - as of that date. The pledges, which were entered
into without the knowledge or approval of the Board, (i) appear to fall outside of
the Company's scope of business and (ii) had effectively reduced the amount of
cash available to the Company. Adjusting for these pledges, cash available from
term deposits as of December 31, 2009, would have been reduced from Rmb507 million (US$75 million) to an amount ofRmb257 million (US$38 million) or less."
"January 2010 stock issuance proceeds. In connection with its ongoing investigation, management has been unable to confirm from statements for the Company's known bank accounts that it had received the US$5 million that, according to the previously issued financial statements, Thriving Blue Limited had paid on January 4, 2010, to purchase 692,520 shares of the Company's common stock. According to the Previously Issued Financial Statements, Thriving Blue
Limited is a British Virgin Islands company that is 100% owned by Mr. Chan,
which had purchased the 692,250 shares on behalf ofMr. Chan, Mr. Sena and the
Company's then president-International Michael Santos."
"June 2010 stock issuance proceeds. In connection with its ongoing investigation,
management has been unable to confirm from statements for the Company's
known bank accounts that the Company had received any of the $29 million that,
according to the Previously Issued Financial Statements, the Company had

received for the sale of 3,735,734 shares of common stock to nominees of Mr. Wu
Shixin in June 2010. The Company is continuing to investigate the purpose for this
stock issuance to nominees of Mr. Wu."
"August 2010 college acquisition. In connection with the Company's ongoing investigation, the Company has learned that the amount that the Company had paid for its acquisition of Hubei International University Business College ("HIUBC")
was overstated and the manner of the acquisition was inaccurately described in the
Previously Issued Financial Statements."
"2010 year-end cash and cash equivalents and term deposits. The Company has
now uncovered through its ongoing investigation that cash and cash equivalents as
of December 31, 2010, which according to the Previously Issued Financial Statements was Rmb244 million (US$37 million), was overstated by at least
Rmb50 million (US$8 million) as of that date."
"The Company has recently discovered that at least Rmb600 million (US$91 million) of the Rmb704 million (US$107 million) amount that was classified as term deposits on the Company's balance sheet as of December 31, 2010, was actually pledged to guarantee the debts of various third parties - many of whom appear to operate outside ofthe Company's scope ofbusiness - as ofthat date. The pledges, which were entered into without the prior knowledge or approval of the Board, (i) appear to fall outside of the Company's scope of business and (ii) had effectively reduced the amount of cash available to the Company. Adjusting for
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these pledges, cash available from term deposits as of December 31, 2010, would
Rmbl04 million (US$16 million) or less."
have been reduced from Rmb704 million (US$107 million) to an amount of
"Taking into account the overstatements in term deposits and cash and cash equivalents described above, the aggregate cash, cash equivalents and term deposits as of December 31, 2010, would have been reduced to Rmb298 million (US$45 million) from the Rmb948 million (US$144 million) reported in the
Previously Issued Financial Statements."
"Term deposits. As noted above, a significant portion of the Company's term
deposits as of December 31, 2009, December 31, 2010, June 30, 2011, and September 30, 2011, was pledged to guarantee the debts of various third parties (many of which appear to operate outside of the Company's scope of business) as
of such dates. To date, the Company has discovered that Prior Management had
over the years entered into at least 40 such previously undisclosed account pledges, involving an aggregate Rmbl,513 million (US$243 million) of the Company's term deposits, without the Company's knowledge or consent. The Company is continuing to investigate this pledging of term deposits for the benefit of third
parties without the Board's knowledge or consent."
"October 2009 college acquisition. Management is investigating whether the amount that the Company had paid for its acquisition ofLijiang College in October
2009 was overstated and whether the manner of the acquisition was accurately
described in the Previously Issued Financial Statements."
"CCLXrevenues. Management is investigating whether any ofthe revenues for its
ELG segment in 2009, 2010 and the first nine months of 2011 have been
overstated. To date, management has discovered that Rmb 96 million of the Rmb208 million of CCLX's revenues for 2010 reported in the Previously Issued Financial Statements was purportedly invoiced in December ofthat year, while a
significant portion of the revenues that CCLX had reported to tax authorities in
China for 2011 was purportedly invoiced in December of that year as well. In connection with the ongoing investigation, management has also had discussions with former CCLX employees and obtained financial data from such staff that
Statements."
management now believes may raise questions above the veracity of CCLX's
historical financial information, as presented in the Previously Issued Financial These disclosures caused further declines in the Company's stock price, which
143.
closed at 10 cents on December 21, 2012.
144.
The dramatic declines in the Company's stock price that occurred as the truth was
revealed were the direct result of Defendants' fraud.
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EVIDENCE OF DEFENDANTS' SCIENTER
145.
Deloitte acted with scienter in that it knew from audit evidence in its possession
that ChinaCast's financial results were misstated or recklessly failed to obtain any audit evidence
to confirm those financial results. Deloitte's scienter is evident from the fact that the
misstatements at issue involved plain vanilla transactions that could have (but were not)
confirmed with the most perfunctory audit procedures.
146. Deloitte's scienter is also evident from the fact that the Company undertook only
one or two significant transactions (such as share issuances and university acquisitions) per year
between 2007 and 2010, each of which should have attracted close scrutiny from any auditor.
Yet nearly all of those limited number of transactions were sham transactions in which (with
respect to the university purchases) cash consideration was never provided by the Company or
(in the case ofshare offerings) cash transferred to the Company was immediately looted.
147. For example, as alleged above, in its 2009 10-K, the Company disclosed that in
2009 it paid RMB 295 million (which is approximately US$44 million) in connection with its acquisition of East Achieve, yet the Company's bank statements and accounts contain no evidence of any such payment. Deloitte was either complicit in the fraud or recklessly failed to
obtain audit evidence confirming the existence of this $44 million payment. Indeed, the very
same type of fraudulent misstatement occurred in the 2010 10-K- where the Company disclosed that it paid RMB 360 million (which is approximately US$54 million) in connection with its
acquisition of Wintown. The fact that Deloitte again certified the existence of a massive cash payment that never occurred further confirms that Deloitte was either complicit in the fraud or
recklessly failed to perform appropriate audit procedures.
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148. Indeed, the fraudulent transactions at issue were so obvious and easy to detect that
Deloitte could only have performed no audit at all of the transactions at issue, choosing to
remain willfully blind to colossal fraud.
149. Sena, the Company's prior CFO, resigned from his position on or about March
26, 2012, coinciding with the resignation of Ron Chan, the prior CEO. In 2011, Sena was one of
the officers put forward by Chan in his attempt to keep absolute control over the company. Further, Chan stated that Sena had signed, in effect, a loyalty pledge to Chan himself -
promising to not work for ChinaCast should Chan lose any control of the board of directors.
150. Prior to becoming a director, Tang was intimately involved with the financing for
Great Wall Acquisition Corporation (ChinaCast's predecessor entity). Along with Kin Shing Li,
Tang was the largest shareholder of Great Wall prior to its IPO on the Singapore exchange.
Tang also loaned hundreds of thousands of dollars to ChinaCast in 2006 to allow ChinaCast to
complete its amendment of its certificate of incorporation and reverse merger onto the NASDAQ exchange. In 2011, Tang was a candidate for the board of directors but was defeated in the
director's election at the company's 2011 Annual Meeting and ceased to be a director. During
his time as a director, Tang served on the Company's audit committee. Despite being labeled an
"independent director" Tang unanimously voted with Ron Chan while Tang was on the board.
151. Contemporaneously with his resignation, prior Company director Yin sold his
stake in ChinaCast. Yin also caused CCL, the company he owned, to remove itself from
ChinaCast's contract structure by transferring ownership ofcertain assets to new owners. By the
end of2010, Yin had removed himself, his company CCL, and his money from ChinaCast.
152.
Prior to being on the ChinaCast board, Xue was a consultant to the Company's
predecessor, Great Wall Acquisition Corp. regarding its merger and listing on the NASDAQ
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exchange. During his time as a director, Xue served on the audit committee of the company and as the "audit committee financial expert." Xue received hundreds of thousands of dollars in
compensation for serving as adirector, including over $600,000 in compensation in 2009 alone.
Despite being well-paid, sitting on the audit committee, serving as the audit committee "expert" and being intimately involved with the workings of the company, Xue recklessly disregarded
readily apparent red flags in the actions of company management and the wholesale looting of
the Company's assets.
153.
Santos was one ofthe directors put forward by Chan in his 2011 attempt to keep
absolute control over the company. In fact, as a director, Santos had unanimously voted with
Chan and management. Further, Chan stated that Santos had signed, in effect, aloyalty pledge to
Chan himself- promising to not work for ChinaCast should Chan lose any control of the board
of directors. NO SAFE HARBOR
154. The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.
The specific statements pleaded herein were not "forward-looking statements" nor were they
identified as "forward-looking statements" when made. Nor was it stated with respect to any of
the statements forming the basis of this Complaint that actual results "could differ materially
from those projected." To the extent there were any forward-looking statements, there were no
meaningful cautionary statements identifying important factors that could cause actual results to
differ materially from those in the purportedly forward-looking statements. Alternatively, to the
extent that the statutory safe harbor does apply to any forward-looking statements pleaded
herein, Defendants are liable for those false forward-looking statements because at the time each
of those forward-looking statements was made, the particular speaker knew that the particular
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forward-looking statement was false, and/or the forward-looking statement was authorized and/or approved by an executive officer of ChinaCast who knew that those statements were false
when made.
CAUSES OF ACTION
FIRST CAUSE OF ACTION
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Promulgated Thereunder - Misstatements and Omissions
All Plaintiffs against DTTC
155.
The Plaintiffs repeat and reallege each and every paragraph contained above as if
set forth herein.
156.
Defendant DTTC knew, or was reckless
in failing to know, of the
misrepresentations contained in, and the material omissions from, the statements as set forth
above.
157.
Throughout the period in which Plaintiffs purchased ChinaCast stock, DTTC,
with knowledge of or reckless disregard for the truth, made, disseminated and approved the filing
with the SEC of its audited financial statements of the Company for the years ended December
31, 2007, December 31, 2008, December 31, 2009, and December 31, 2010, as set forth above,
which were false and misleading in that they contained misrepresentations of material facts and
failed to disclose material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
Plaintiffs specifically read,
reviewed, and relied on these audited financial statements in purchasing ChinaCast securities.
158.
Deloitte issued unqualified audit opinions that ChinaCast's consolidated financial
statements for the years ended December 31, 2007, December 31, 2008, December 31, 2009, and
December 31, 2010 were prepared in accordance with "accounting principles generally accepted
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in the United States of America" and that Deloitte had conducted its audit in accordance with the
standards of the PCAOB. Deloitte also issued unqualified opinions regarding the Company's
internal controls over financial reporting in 2008 and 2009. Plaintiffs specifically read, reviewed,
and relied on these statements inpurchasing ChinaCast securities.
159. By reason of the conduct alleged herein, Defendant DTTC knowingly or
recklessly, directly and indirectly, violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that it made untrue statements of material facts or omitted to state
material facts necessary in order to make statements made, in light of the circumstances under
which they were made, not misleading, on which Plaintiffs relied in connection with their
purchases of ChinaCast securities.
160.
As a result of the publication of the materially false and misleading information
and failure to disclose material facts as set forth above, the market price ofChinaCast's common
stock was artificially inflated at all relevant times alleged herein. In particular, the market price
of ChinaCast common stock was artificially inflated due to the materially false and misleading
representations and omissions alleged herein at all times Plaintiffs purchased ChinaCast common
stock between March 31, 2008, and March 31, 2012.
161. Ignorant of the fact that the market price of ChinaCast's publicly traded common
stock was artificially inflated, and relying directly upon the false and misleading statements
alleged herein, as well as on the integrity of the market in which the common stock traded, and
thus indirectly on the false and misleading statements made by defendants and/or on the absence
of material adverse information, Plaintiffs acquired ChinaCast common stock at artificially high
prices and were damaged thereby when the truth was revealed.
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162.
Had Plaintiffs known of the materially adverse information not disclosed by
DTTC, and known that ChinaCast's stock price was artificially inflated due to fraud, Plaintiffs
would not have purchased ChinaCast common stock at all or not atthe inflated prices paid. 163. Upon disclosure of the true facts that had still been withheld from the market at
the time ofPlaintiffs' purchases, the price of ChinaCast's common stock declined, and Plaintiffs suffered damages as a result of Defendant's violation of Section 10(b) and Rule 10b-5 in an
amount to be proven at trial. Plaintiffs' damages were the direct and proximate result of
Defendant's unlawful conduct as alleged herein.
164.
The Plaintiffs have suffered substantial damages in that, in direct reliance on
DTTC's false and misleading statements and omissions, and in reliance on the integrity of the
market, they paid artificially inflated prices for ChinaCast securities as a result of Defendant's
violations of Section 10(b) of the Exchange Act and Rule 10b-5. At the time of purchase by the
Plaintiffs of ChinaCast's securities, the fair and true market value of said securities was
substantially less than the prices paid by them.
165.
By virtue of the foregoing, Defendant DTTC violated Section 10(b) of the
Exchange Act and Rule 10b-5 promulgated thereunder.
166.
Plaintiffs have brought this claim within two years of discovery of the violations
alleged herein, and within five years ofthe violations alleged herein. Consequently, this action is
timely.
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SECOND CAUSE OF ACTION
Violations of Section 20(a) of the Exchange Act
By all Plaintiffs against Deloitte US
167.
Plaintiffs repeat and reallege each and every allegation contained in each ofthe
foregoing paragraphs as if set forth fully herein. This Count is asserted against the Deloitte US
and is based upon Section 20(a) ofthe Exchange Act, 15 U.S.C. 78t(a).
168.
Deloitte US, by virtue of its position as a key member of ChinaCast's audit team
providing expertise and passing on the US GAAP issues, was at the time of the wrongs alleged
herein, acontrolling person ofDTTC within the meaning ofSection 20(a) ofthe Exchange Act.
169. Deloitte US had the power and influence, and did in fact exercise that power and
influence, to cause DTTC to publish audited financial statements that were not, in fact, in
accordance with GAAP. Upon information and belief, DTTC would not have signed off on the
US GAAP aspects of the Company's financial statements without the approval of Deloitte US.
170. By reason of the conduct alleged in Count I ofthe Complaint, DTTC is liable for
violations of Section 10(b) and Rule 10b-5 promulgated thereunder, and Deloitte US is liable
based on its control of DTTC and its participation in the preparation and publication ofthe false
and misleading audited financial statements.
171.
Deloitte US is liable for the aforesaid wrongful conduct, and is liable to Plaintiffs
for the substantial damages which they suffered in connection with their purchases ofChinaCast
common stock.
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THIRD CAUSE OF ACTION
Violations of Section 10(b) of the Exchange Act and Rule 10b-5
Promulgated Thereunder - Misstatements and Omissions By All Plaintiffs against the Individual Defendants
172. The Plaintiffs repeat and reallege each and every paragraph contained above as if
set forth herein.
173.
The Individual Defendants knew, or were reckless in failing to know, of the
misrepresentations contained in, and the material omissions from, the statements as set forth
above.
174. Throughout the period in which Plaintiffs purchased ChinaCast stock, the
Individual Defendants, with knowledge of or reckless disregard for the truth, made, disseminated
and published the false and misleading annual reports of the Company for the years ended
December 31, 2007, December 31, 2008, December 31, 2009, and December 31, 2010, as set
forth above, which were false and misleading in that they contained misrepresentations of
material facts and failed to disclose material facts necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading. 175. Plaintiffs specifically read, reviewed, and relied on the statements contained in the
annual reports of the Company for the years ended December 31, 2007, December 31, 2008,
December 31, 2009, and December 31, 2010 in purchasing ChinaCast securities.
176. By reason of the conduct alleged herein, the Individual Defendants knowingly or
recklessly, directly and indirectly, violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that they made untrue statements of material facts or omitted to state
material facts necessary in order to make statements made, in light of the circumstances under
-47-
which they were made, not misleading, on which Plaintiffs relied in connection with their
purchases of ChinaCast securities.
177.
As a result of the publication of the materially false and misleading information
and failure to disclose material facts as set forth above, the market price of ChinaCast's common
stock was artificially inflated at all relevant times alleged herein. In particular, the market price
of ChinaCast common stock was artificially inflated due to the materially false and misleading
representations and omissions alleged herein at all times Plaintiffs purchased ChinaCast common
stock between March 31, 2008, and March 30, 2012.
178.
Ignorant of the fact that the market price of ChinaCast's publicly traded common
stock was artificially inflated, and relying directly upon the false and misleading statements
alleged herein, as well as on the integrity ofthe market in which the common stock traded, and
thus indirectly on the false and misleading statements made by defendants and/or on the absence
of material adverse information, Plaintiffs acquired ChinaCast common stock at artificially high
prices and were damaged thereby when the truth was revealed.
179. Had Plaintiffs known of the materially adverse information not disclosed by the
Individual Defendants, and known that ChinaCast's stock price was artificially inflated due to
fraud, Plaintiffs would not have purchased ChinaCast common stock at all or not at the inflated
prices paid.
180.
Upon disclosure of the true facts that had still been withheld from the market at
the time of Plaintiffs' purchases, the price of ChinaCast's common stock declined, and Plaintiffs suffered damages as a result of Defendants' violation of Section 10(b) and Rule 10b-5 in an amount to be proven at trial. Plaintiffs' damages were the direct and proximate result of the
Individual Defendants' unlawful conduct as alleged herein.
-48-
181.
The Plaintiffs have suffered substantial damages in that, in direct reliance on the
Individual Defendants' false and misleading statements and omissions, and in reliance on the
integrity ofthe market, they paid artificially inflated prices for ChinaCast securities as a result of
the Individual Defendants' violations of Section 10(b) of the Exchange Act and Rule 10b-5. At
the time ofpurchase by the Plaintiffs of ChinaCast's securities, the fair and true market value of
said securities was substantially less than the prices paid by them.
182.
By virtue of the foregoing, the Individual Defendants violated Section 10(b) of
the Exchange Act and Rule 10b-5 promulgated thereunder.
183.
Plaintiffs have brought this claim within two years of discovery of the violations
alleged herein, and within five years ofthe violations alleged herein. Consequently, this action is
timely.
FOURTH CAUSE OF ACTION
Violations of Section 18 of the Exchange Act
By Plaintiffs Columbia Pacific Opportunity Fund, L.P.; Fir Tree Value Master Fund, L.P.; Lake Union Capital Fund L.P.; Lake Union Capital TE Fund L.P.; and Ashford Capital
Management, Inc. Against All Defendants
184.
This cause of action is brought by Plaintiffs Columbia Pacific Opportunity Fund,
L.P.; Fir Tree Value Master Fund, L.P.; Fir Lake Union Capital Fund L.P.; Lake Union Capital
TE Fund L.P.; and Ashford Capital Management, Inc. (collectively, the "Section 18 Plaintiffs").
185.
For purposes of this claim, the Section 18 Plaintiffs expressly exclude and
disclaim any allegation that could be construed as alleging fraud or intentional or reckless
misconduct, as this claim is based on solely on claims of strict liability and/or negligence for false and misleading statements under Section 18 of the Securities Exchange Act.
-49-
186.
This Count is asserted against all Defendants for violations of Section 18 of the
Exchange Act, 15 U.S.C. 78r, on behalf of the Section 18 Plaintiffs who were damaged thereby.
187. The Section 18 Plaintiffs have brought this claim within one year of discovery of
the violations alleged herein, and within three years of the accrual of this cause of action, in
accordance with relation back principles under the applicable Federal Rules ofCivil Procedure.
188.
As alleged herein, Defendants made or caused to be made statements in
documents filed with the SEC pursuant to the rules or regulations of the Exchange Act or
undertakings contained in registration statements as provided in subsection (d) of section 15 of

the Exchange Act, which statements were, at the time and in light of the circumstances under
which made, false or misleading with respect to material facts.
189.
The Section 18 Plaintiffs actually read, reviewed and relied on the false and
materially misleading statements contained in these documents, as set forth above, in making the
decision to purchase ChinaCast securities on Plaintiffs' behalf.
190. In ignorance of the falsity of Defendants' statements or of the true facts, the
Section 18 Plaintiffs purchased ChinaCast securities in actual, eyeball reliance upon the Section
18 Defendants' representations.
191.
Defendants' materially false or misleading statements artificially inflated the price
of ChinaCast securities.
192. Had they known the true facts, the Section 18 Plaintiffs would not have purchased
the ChinaCast securities and/or would not have purchased them at the inflated price they paid.
193.
Upon disclosure of the true facts, the price ofthe ChinaCast securities purchased
by the Section 18 Plaintiffs dropped, and the Section 18 Plaintiffs suffered damages in an amount
to be proven at trial.
-50-
194.
By reason of the foregoing, Defendants are liable to the Section 18 Plaintiffs for
violations of Section 18 of the Exchange Act, 15 U.S.C. 78r.

PRAYER FOR RELIEF
WHEREFORE, Plaintiffs respectfully request relief and judgment, as follows: (a) Awarding compensatory damages against Defendants for all damages sustained as a
result of Defendants' wrongdoing, in an amount to be proven at trial, including pre-judgment and

post-judgment interest thereon;
(b) Awarding Plaintiffs their reasonable costs and expenses incurred in this action; and
(d) Such other and further relief as the Court may deem just and proper.
JURY DEMAND
The Plaintiffs hereby demand a trial by jury as to all issues so triable.
Dated: February 15,2013

New York, New York
LOWENSTEIN SANDLER LLP
By:
Lawrence M. Rolnick Amiad Kushner 1251 Avenue of the Americas 17th Floor
New York, NY 10020

Tel. 212.262.6700
-and-
65 Livingston Avenue Roseland,NJ 07068 Attorneys for Plaintiffs
-51-
Special Situations Fund III QP, L.P. Purchases of ChinaCast Education Corporation
March 31, 2008 - March 30, 2012
Tran Trade Settle
Code Security
Date
Date
Quantity
Price Per Share
by
ChinaCast Education Corporation
9/26/2008
10/1/2008
693,000
2.60
Special Situations Cayman Fund, L.P.
Purchases of ChinaCast Education Corporation

March 31, 2008 - March 30, 2012
Tran Trade Settle
Code
Security
Date
Date
Quantity
Price Per Share
by
9/26/2008
10/1/2008
460,000
2.60
Fir Tree Capital Opportunity Master Fund, L.P. Purchases of ChinaCast Education Corporation
March 31, 2008 - March 30, 2012
Tran Trade Settle
Code Security
by ChinaCast Education Corporation
Date
07/03/2008
Date
07/03/2008
Quantity
814,111
Price Per Share

4.29
Fir Tree Value Master Fund, L.P.

March 31, 2008 - March 30, 2012
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Settle
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Security
Date
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Education Education Education Education
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07/03/2008 03/21/2011
03/29/2011 05/25/2011
07/03/2008 03/24/2011
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100,100 100,000
4.26 6.11 6.15
04/01/2011
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03/23/2012
03/27/2012
99,466 94,260 104,800
4.4048 4.3403
4.453 4.3048
03/28/2012
03/30/2012
129,824
Lake Union Capital Fund L.P. Purchases of ChinaCast Education Corporation March 31, 2008 - March 30, 2012
Tran
Trade
Date
Settle
L")ate
Code Security
Quantity
23500 25000
Price Per Share

2.5646 2.4003 2.6 2.6205
2.55
by
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10/1/2008 10/1/2008 10/1/2008 10/6/2008 10/10/2008 11/5/2008 11/19/2008 12/3/2008 12/5/2008 1/2/2009 1/7/2009 1/23/2009 1/30/2009 2/6/2009 2/17/2009 3/2/2009 3/3/2009 3/6/2009 3/13/2009 3/17/2009 3/20/2009 3/23/2009 3/27/2009 3/30/2009 3/31/2009 4/7/2009 4/22/2009 4/23/2009 4/24/2009 4/28/2009 4/29/2009 4/30/2009 5/1/2009 5/6/2009 6/8/2009 6/18/2009 6/22/2009 6/23/2009
805000
1000
1000 2600 100 3500
2.4212
2.39
2.004
2.148 2.099
1000
2300 1500 2000 2000
2.6113
2.498 2.6781 2.7345
2.95
2000
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2000
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2.7745
2.44 2.3633 2.8486 2.89 3.0455
6000
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1000 3000
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6/24/2009 7/2/2009 7/17/2009 7/17/2009 7/21/2009 7/23/2009 9/3/2009 9/3/2009 9/4/2009 9/8/2009 9/9/2009 9/15/2009 9/23/2009 9/23/2009 11/6/2009 11/6/2009 12/7/2009 12/29/2009 1/28/2010 3/18/2010 3/18/2010 3/19/2010 7/12/2010 7/12/2010 7/13/2010 7/13/2010 7/14/2010 7/16/2010 7/19/2010 7/20/2010 7/21/2010 8/6/2010 8/9/2010 8/11/2010 8/18/2010 8/19/2010 8/19/2010 8/20/2010 8/20/2010 8/23/2010 9/10/2010 9/10/2010 9/13/2010 9/14/2010 9/15/2010 9/16/2010 9/17/2010
15000
25000 2500
7.0107 7.4349 6.3234

6.4432
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6.9764 7.0471 5.8855

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6.0768
6.5995
6.8045
6.8357 6.56 6.617 6.85
55000 350000 50000

5000 27500
13300
7.2795
6.8741 7.8657 7.931 7.9645
6700 10000 70000 2200 20000
5.6474 5.5797
5.6858 5.6671
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5.8614
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5.9
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6.8727
7.0622 6.247 6.2678
9000
26000
2000
6.1902
6.2 6.2085 6.2755
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6.1817 6.2678 6.3997
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9/15/2010 9/17/2010 9/20/2010 9/21/2010 9/24/2010 10/1/2010 10/5/2010 10/6/2010 10/7/2010 10/8/2010 10/11/2010 10/12/2010 10/14/2010 10/14/2010 10/15/2010 10/18/2010 10/20/2010 10/21/2010 10/22/2010 10/25/2010 10/25/2010 10/26/2010 11/2/2010 11/9/2010 11/9/2010 11/10/2010 11/11/2010 11/16/2010 12/21/2010 2/2/2011 2/4/2011 2/4/2011 2/7/2011 2/14/2011 2/16/2011 2/17/2011 2/18/2011 2/22/2011 3/1/2011 3/2/2011 3/3/2011 3/18/2011 3/22/2011 3/23/2011 3/29/2011 3/29/2011 3/29/2011
9/20/2010 9/22/2010 9/23/2010 9/24/2010

9/29/2010
17500 25000 4726 6000 23000 69000 65000 17000

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6.8963
7.0838
6.9658 7.3283 7.5391 7.6355 7.5535 7.606
10/6/2010 10/8/2010 10/12/2010 10/13/2010 10/14/2010 10/14/2010 10/15/2010 10/19/2010 10/19/2010 10/20/2010 10/21/2010 10/25/2010 10/26/2010 10/27/2010 10/28/2010 10/28/2010 10/29/2010 11/5/2010 11/15/2010 11/15/2010 11/16/2010 11/16/2010 11/19/2010 12/27/2010 2/7/2011 2/9/2011 2/9/2011 2/10/2011 2/17/2011 2/22/2011 2/23/2011 2/24/2011 2/25/2011 3/4/2011 3/7/2011 3/8/2011 3/23/2011 3/25/2011 3/28/2011 4/1/2011 4/1/2011 4/1/2011
3000 11000 9000 10000 13000 17500 6000 7000 37000

3000
7.6816
7.711
7.448
7.5918 7.4723 7.519
7.3357
7.3132 7.4943 7.5822 7.6321 7.6771 7.726 7.25 7.9373 7.4913 7.784 7.6468 7.0839 7.5827
3000 25000 12000 4000

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16000 7000 1000 7000 25945 10000
62600
87400 20000 57000
7.0016 7.0901 7.2048 6.8041

6.2602
40000
2500 2000 3000 4000 1000
2000
6.7904
7.0875
6.9248
6.18
6.21
6.377
5.7153 5.9099
20000 30000 5000 23300 30000 61700
6.1433
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4/8/2011 4/11/2011 4/12/2011 4/13/2011 4/14/2011 4/15/2011 4/19/2011 4/20/2011 4/25/2011 4/26/2011 4/26/2011 5/16/2011 5/17/2011 5/18/2011 6/3/2011 6/3/2011 6/6/2011 6/13/2011 6/13/2011 6/15/2011 6/17/2011 6/20/2011 6/21/2011 6/22/2011 6/24/2011 6/27/2011 6/28/2011 6/29/2011 6/30/2011 7/1/2011 7/5/2011 7/6/2011 7/8/2011 7/11/2011 7/12/2011 7/13/2011 7/18/2011 7/19/2011 7/20/2011 7/21/2011 7/26/2011 7/27/2011 7/29/2011 8/1/2011 8/2/2011 8/3/2011 8/4/2011
20000
20000 10000 220000 45000 110000 60000
10000
6.0321 6.145
6.0995
6.0834
5.9625
5.5374
5.5551
5.8144 5.731 5.925 5.8351 6.4116

6.7267 6.4536
50000
25000 25000
30000
20000 10000 10000 50000 23000
5.7482
5.63
5.422
4.5 4.4803 4.41 4.45
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6000 400 300
4.6967
4.4079
4.3792
7000
600 2000 6300
4.5435
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6000 2000 2000 2000 7000
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1000
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3000
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2000
1500
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4000
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by by
by by
8/2/2011 8/4/2011 8/5/2011 8/8/2011 8/9/2011 8/10/2011 8/11/2011 8/12/2011 8/16/2011 8/17/2011 8/18/2011 8/19/2011 8/22/2011 8/23/2011 8/25/2011 8/26/2011 8/29/2011 8/30/2011 8/31/2011 9/1/2011 9/2/2011 9/6/2011 9/7/2011 9/8/2011 9/9/2011 9/12/2011 9/13/2011 9/14/2011 9/15/2011 9/16/2011 9/19/2011 9/20/2011 9/21/2011 9/22/2011 9/23/2011 9/26/2011 9/28/2011 9/29/2011 9/30/2011 10/3/2011 10/4/2011 10/6/2011 10/7/2011 10/10/2011 10/12/2011 10/13/2011 10/14/2011
8/5/2011 8/9/2011 8/10/2011 8/11/2011 8/12/2011 8/15/2011 8/16/2011 8/17/2011 8/19/2011 8/22/2011 8/23/2011 8/24/2011 8/25/2011 8/26/2011 8/30/2011 8/31/2011 9/1/2011 9/2/2011 9/6/2011 9/7/2011 9/8/2011 9/9/2011 9/12/2011 9/13/2011 9/14/2011 9/15/2011 9/16/2011 9/19/2011 9/20/2011 9/21/2011 9/22/2011 9/23/2011 9/26/2011 9/27/2011 9/28/2011 9/29/2011 10/3/2011 10/4/2011 10/5/2011 10/6/2011 10/7/2011 10/12/2011 10/13/2011 10/13/2011 10/17/2011 10/18/2011 10/19/2011
3500
4500 300 200
4.8072
4.6577 4.48 4.38 4.355
2000
6500
4.3419 4.2707
4.5 4.966
13000 100000
1000 14000 7000 10000
7000
5.0292 4.8241 4.7367

4.7576
4.712
1000
10500
2500 2750
4.6956 4.5585
4.6165
4.5544
3750
1250
250
4.3964
4.456 4.388 4.3027
4.572 4.4927
3500 1500 250 1750 2000 6000
4.4261 4.3097
6350 17850
8800 2500 2500 3000 4250
4.2965
4.3719 4.3657 4.2497 4.2161 4.2777
4.2885
4.131 4.1421
10250
7500 2000
3.9635 3.9332
3.7361 3.7515 3.1226 2.5294 3.1207 3.1 3.39 3.3867
12500
17000 10500 44000 30000 10300 1000 1000 6600
2000 500
3.3328
3.5
by by by by by by by by by by by by by by by by by by by
by


ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation
by by
ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation
by by
by by by by by
by by
by by

ChinaCast ChinaCast ChinaCast ChinaCast
Education Education Education Education
10/17/2011 10/20/2011 10/18/2011 10/21/2011 10/20/2011 10/25/2011 10/24/2011 10/27/2011 10/25/2011 10/28/2011 10/26/2011 10/31/2011 10/27/2011 11/1/2011 10/28/2011 11/2/2011 10/31/2011 11/3/2011 11/1/2011 11/4/2011 11/2/2011 11/7/2011 11/3/2011 11/8/2011 11/4/2011 11/9/2011 11/7/2011 11/10/2011 11/8/2011 11/14/2011 11/9/2011 11/15/2011 11/10/2011 11/16/2011 11/11/2011 11/16/2011 11/17/2011 11/22/2011 11/18/2011 11/23/2011 11/21/2011 11/25/2011 11/22/2011 11/28/2011 11/23/2011 11/29/2011 11/28/2011 12/1/2011 11/29/2011 12/2/2011 11/30/2011 12/5/2011 12/1/2011 12/6/2011 12/2/2011 12/7/2011 12/12/2011 12/15/2011 12/13/2011 12/16/2011 12/14/2011 12/19/2011 12/15/2011 12/20/2011 12/16/2011 12/21/2011 12/20/2011 12/23/2011 12/21/2011 12/27/2011 12/22/2011 12/28/2011 12/23/2011 12/29/2011 1/3/2012 12/28/2011 1/4/2012 12/29/2011 1/5/2012 12/30/2011 1/6/2012 1/3/2012 1/9/2012 1/4/2012 1/10/2012 1/5/2012 1/6/2012 1/11/2012 1/9/2012 1/12/2012 1/13/2012 1/19/2012 1/17/2012 1/20/2012
2000
17200 29400 32500
24500
3.43
3.5126 3.6775 3.8352 3.9583
13500
84500 12500 7500 5250 6700
1800
3.9443
4.0817
4.0789
4.0663 3.9452 3.7601 3.8361

3.8019
2650
2200
3.7986 3.8461
6400 3700 2600 800 3500

500
3.7384
3.9638 3.9063
5.028
5.098
2000 1400 5600 1800 2700 800

600
5.204
5.2746
5.2675
5.1461
4.373 4.9775
5.2495 5.2533
600 800
600
5.4025
5.4083 5.3069
2600 1600
5.3663
5.391 5.71 5.94 6.1257 6.1607 6.2 6.0872 6.0771
1000
600
200
1400 1200 200 1800

1400
800
6.1606 5.9314
5.88
5000
300
200 200 400

300
5.935
6.07
5.7175
5.69
by by by by by by by by by by by by by by by by by
by



by by by by by by by by by by


1/18/2012 1/25/2012 1/26/2012 1/27/2012 1/30/2012 1/31/2012 2/1/2012 2/2/2012 2/3/2012 2/6/2012 2/7/2012 2/8/2012 2/9/2012 2/13/2012 2/14/2012 2/15/2012 2/16/2012 2/17/2012 2/21/2012 2/23/2012 2/24/2012 2/27/2012 2/28/2012 2/29/2012 3/1/2012 3/5/2012 3/15/2012 3/22/2012
1/23/2012 1/30/2012 1/31/2012 2/1/2012 2/2/2012 2/3/2012 2/6/2012 2/7/2012 2/8/2012 2/9/2012 2/10/2012 2/13/2012 2/14/2012 2/16/2012 2/17/2012 2/21/2012 2/22/2012 2/23/2012 2/24/2012 2/28/2012 2/29/2012 3/1/2012 3/2/2012 3/5/2012 3/6/2012 3/8/2012 3/20/2012 3/27/2012
800
200 1400 600 800 800 800
600 200 400 1200
5.9496
6.355 6.3107 6.3633 6.2125 6.1925 6.13 6.1233
6.085
6.075 5.8792 5.8463
2800
800
5.7848
5.71 5.5867
600
600 1000 400 200 100 300
100
5.416
5.415
5.425
5.59 5.9983 6.08
300
400
5.9101
5.6963 5.5861 5.664
1900 3600 800 100

400
5.325
4.82 4.505
Lake Union Capital TE Fund L.P.

March 31, 2008 - March 30, 2012
Tran
Trade
Date
Settle
Date
Code Security
by by by by by by
Quantity
39900
Price Per Share
ChinaCast Education ChinaCast Education ChinaCast Education ChinaCast Education ChinaCast Education ChinaCast Education
Corporation Corporation Corporation Corporation Corporation Corporation
10/3/2011 10/6/2011 10/11/2011 10/14/2011 10/12/2011 10/17/2011 10/19/2011 10/22/2011 10/28/2011 11/2/2011 11/2/2011 11/7/2011
3.077 3.5099
3.4654
10000
10000 15000 10000 17500
3.548 4.1023
3.81
Ashford Capital Management, Inc. Purchases of ChinaCast Education Corporation March 31, 2008 - March 30, 2012
Tran
Trade
Code
Security
Date
Quantity
50,000 40,000
4,000 6,200 4,500 5,000 20,000 9,600 20,000
Price Per Share
by by by by by
by
12/5/2008
12/8/2008 12/16/2008
2.2123 2.2850 2.2845 2.6500 2.6903 2.5900

1/6/2009
1/6/2009 1/7/2009 1/7/2009 1/8/2009 1/12/2009
ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation
by by by
by by
2.6314
2.5252
2.6648
2.5850
1/13/2009
1/14/2009 1/15/2009
5,000
17,000 10,000 5,000 1,500
2.5198 2.5352
2.5100 2.5333 2.6670 2.6900
by by by by
by
1/16/2009
1/21/2009 1/26/2009 1/29/2009 2/25/2009 3/6/2009 3/9/2009 3/10/2009
10,000
1,500 3,600
by by by by by by by by by by by by by by by by by by by by
by

2.8247 2.6848 2.5837

2.5070 2.4099 2.4045
11,100
30,500 35,000
3/11/2009 3/12/2009
4/20/2009
28,600 10,000
10,800
700
3.8350 3.7358
3.9400
4/21/2009
4/24/2009
ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation
14,000
4/27/2009
4/28/2009
14,000
15,000 11,500
3.7907
3.8274
5/12/2009 5/13/2009
5/13/2009 5/19/2009 5/27/2009 6/8/2009 6/8/2009 6/15/2009 6/17/2009 8/11/2009 8/31/2009
5.1938 4.8850
5.0035 5.1016
1,200
45,000
300
12,250
7,400 12,500 10,100 52,700 24,300 8,500
5.4300 5.6100
5.6179
5.6118
5.3799
6.0103 6.0097
by
by by by by
by by by by

9/2/2009 10/1/2009 10/2/2009 10/27/2009 10/28/2009

12/2/2009
1,000 5,395 14,200

9,600
6.0400 7.2071
7.0822 6.8539

7,405 24,600
500
6.5153 6.8500
7.0623
12/22/2009 1/22/2010 1/25/2010

17,400
300 200 700
6.9085 6.9790
by by by

1/26/2010 5/10/2010
6/28/2010 6/29/2010 7/2/2010
7/6/2010
6.8264
6.5418 6.2659
6.0719 5.7007 5.6220
83,500
66,500
60,300 12,500 5,000 3,500 2,000 5,400

7/7/2010 7/8/2010 7/14/2010
5.5800
5.6786 6.0569

7/16/2010
7/16/2010 7/19/2010 7/19/2010 7/20/2010 9/17/2010 9/21/2010 9/28/2010 9/29/2010 11/4/2010 12/16/2010
12/17/2010
6.0500
6.01 6.2900 6.25 6.2750
2,500 2,700
100
by by by by by by by by

1,200 53,500
6.8151 7.0400 7.0343 7.0331

7.7254
19,300
21,400 17,700 16,600 2,600
900

by by by by
by by by by by by by by by by by

7.5380 7.5375
7.5173 7.1300

12/20/2010 12/21/2010 2/3/2011 2/4/2011
7,200
27,900
52,200
7.5800
6.9649 7.1967
20,000
5,000 15,000 18,800 8,900 25,000 63,800

2/7/2011
2/8/2011 3/1/2011 3/1/2011 3/2/2011
3/2/2011
7.0649 6.2938 6.2538

6.0400 6.2800 6.3192
3/8/2011 3/9/2011 3/10/2011 3/11/2011 3/11/2011 3/14/2011 3/15/2011
34,400
5,000 25,000 32,800 50,000 17,200 17,000

6.0200 6.0167
5.8828 6.0264 5.8077 5.5843
by by by
by
by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by
ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation
3/18/2011 3/18/2011
22,300
700
5.7850
5.8261
5.765 5.8379 5.8561
5.9400
3/18/2011 3/18/2011 3/18/2011 3/21/2011

3/29/2011 4/4/2011 4/12/2011
4,200 14,300 10,800 4,400

800
6.0388 6.0389 5.6904 5.1684 5.0031 5.1739

5.2992
6,900
29,600
6/28/2011
6/29/2011
30,000
39,200
6/30/2011 7/1/2011
7/14/2011
16,896 24,904 25,000 35,100 112,300 34,500

32,900
5.0600 4.1711 4.3146 4.3700 4.3387

4.5300
8/8/2011 8/9/2011
8/9/2011 8/11/2011
8/12/2011
9/9/2011
211,400 25,000 45,300 20,000 79,608

69,000
4.4225
4.0775
10/31/2011 11/14/2011 11/15/2011 11/16/2011 11/17/2011 11/17/2011 11/18/2011 11/18/2011 11/21/2011 11/22/2011 11/23/2011 11/28/2011
3.9297 4.9768 5.2478

5.0482
130,792 28,600 100,900 60,000 62,190 29,110 7,400 14,000 45,900 67,500 10,000 4,857
8,400
5.0357 5.0855 5.0974 5.1768 5.2547
5.2215
5.1539 4.4805 5.3256 5.4100
11/29/2011
12/5/2011
12/8/2011
12/9/2011 12/12/2011 1/10/2012

1/11/2012 1/11/2012
5.4150
5.4300 5.8591 5.8200 5.8509 5.8850 5.8530 6.4300 6.2573 5.8800 5.6050 5.585
32,659
91,675
20,000 41,417 6,667 28,301 4,609 6,300

193,000 5,000
1/11/2012 1/12/2012
1/24/2012
1/25/2012 2/7/2012
2/21/2012
2/21/2012
by by by by
2/23/2012
2/27/2012
7,000 200,000 26,443 5,100
5.9997
5.9900 4.6900
4.7113
3/16/2012 3/21/2012
ZS EDU L.P.

March 31, 2008 - March 30, 2012
Tran
Trade
Code
Security
Date
Quantity
491,871
670,522
Price Per Share
by by by by by
by by
3/18/2011 3/21/2011 3/22/2011 3/23/2011

3/24/2011
ChinaCast ChinaCast ChinaCast ChinaCast ChinaCast
Education Education Education Education Education
Corporation Corporation Corporation Corporation Corporation
478,114 220,420 358,561 198,000

208,000
3/25/2011 3/28/2011
$ $ $ $ $ $ $
5.67 6.09
6.16
6.13
6.50
6.50
6.51
MRMP-Managers LLC
Purchases of ChinaCast Education Corporation March 31, 2008 - March 30, 2012
Tran
Trade
Code
Security
Date
Quantity
65,390 1,918
Price Per Share
by by by by
by
ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation ChinaCast Education Corporation
by
5/12/2010 5/13/2010 5/14/2010 5/17/2010 12/21/2010 8/12/2011
$ $
6.48 7.00
108,878 44,011 400,000

107,305
$ $ $ $
6.88
6.78
7.10 5.00

Deloitte - ChinaCast Education

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JS 44C/SDNY REV.

SPECIAL SITUATIONS FUND III QP, L.P. [see attachment]

ATTORNEYS (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER

ATTORNEYS (IF KNOWN)

Lowenstein Sandler LLP, 1251 Avenue of the Americas, NY, NY 10020

If yes, was this case Vol. D Invol.

If yes, give date

& Case No.

IS THIS AN INTERNATIONAL ARBITRATION CASE?

FORFEITURE/PENALTY AGRICULTURE OTHER FOOD &

1)110 [ ]120 11130 [ ]140 11150

[ ]362 [ 1365 [] 368

[ 1315 AIRPLANE PRODUCT

[ ] 320 ASSAULT, LIBEL&

[ ]400 [1410 11430 I 1450 [ ]460 11470

DRUG RELATED SEIZURE OF PROPERTY

[ ] 340 MARINE [ ]345 MARINE PRODUCT

[ J350 MOTOR VEHICLE [ ] 355 MOTOR VEHICLE

[ ] 820 COPYRIGHTS []830 PATENT [ ] 840 TRADEMARK

ORGANIZATION ACT (RICO) [ ]480 [ ]490 [1810 W850

SELECTIVE SERVICE SECURITIES/ '

[ 1360 OTHER PERSONAL

J862 J863 ] 864 ] 865

[ 1890 OTHER STATUTORY

OTHER CONTRACT CONTRACT 1 1195 PRODUCT LIABILITY []196 FRANCHISE

FEDERAL TAX SUITS

[1891 AGRICULTURAL ACTS [ ]892 ECONOMIC

[ ]441 VOTING [ I 442 EMPLOYMENT [ 1443 HOUSING/

[ ]870 TAXES (U.S. Plaintiffor

[ ] 871 IRS-THIRD PARTY

[ J900 APPEAL OF FEE

1)210 [ I 220 [ ]230 []240 11245

CONDEMNATION FORECLOSURE RENT LEASE & EJECTMENT

[ ]444 WELFARE [ J445 AMERICANS WITH

PRISONER CIVIL RIGHTS

[ ] 550 CIVILRIGHTS [ ] 555 PRISON CONDITION

[ ) 446 AMERICANS WITH

HABEAS CORPUSALIEN DETAINEE

TORTS TO LAND TORT PRODUCT LIABILITY ALL OTHER REAL PROPERTY

[ ]440 OTHER CIVIL RIGHTS

OTHER IMMIGRATION ACTIONS

Check if demanded in complaint:

CHECK IF THIS IS A CLASS ACTION

DOYOU CLAIM THIS CASE IS RELATED TO A CIVIL CASENOW PENDING IN S.D.N.Y.?

Check YESonlyif demanded in complaint

JURY DEMAND: YES NO

IXl 1 r,riir,=,i pZ!L

I-! 3 Remanded [~] 4 Reinstated or U * n.mmHi L_l

Q 5 Transferredstrict) D 6 Multidistrict LJ | from uition

D 7 Appeal to District Judgefrom

a. all parties represented

D1U.S. PLAINTIFF 2U.S. DEFENDANT H 3FEDERAL QUESTION (U.S. NOT APARTY)

(28 USC 1332, 1441)

CITIZENSHIP OF PRINCIPAL PARTIES (FOR DIVERSITY CASES ONLY)

CITIZEN OF THIS STATE

CITIZEN ORCOUNTRY OF A SUBJECT FOREIGN

J!^^^ ANOTHER STATE JS^^^1*06 N5 t]5 OF BUSINESS IN

CITIZEN OF ANOTHER STATE []2 []2

PLAINTIFF(S) ADDRESS(ES) AND COUNTY(IES)

DEFENDANT(S) ADDRESS(ES) AND COUNTY(IES)

THIS ACTION SHOULD BE ASSIGNED TO:

ADMITTED TO PRACTICE IN THIS DISTRICT

N YES (DATE ADMITTED Mo.