UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933

Release No. 9933 / September 30, 2015

SECURITIES EXCHANGE ACT OF 1934

Release No. 76030 / September 30, 2015

ADMINISTRATIVE PROCEEDING

File No. 3-16852

In the Matter of

 FOCUS MEDIA HOLDING 

 LIMITED and JASON JIANG,

Respondents.

ORDER INSTITUTING CEASE-ANDDESIST PROCEEDINGS PURSUANT TO 

SECTION 8A OF THE SECURITIES ACT 

OF 1933 AND SECTION 21C OF THE 

SECURITIES EXCHANGE ACT OF 1934,

MAKING FINDINGS, AND IMPOSING A 

CEASE-AND-DESIST ORDER

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that 

cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities 

Act of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 

(“Exchange Act”), against Focus Media Holding Limited (“Focus Media”) and Jason Jiang 

(“Jiang”, and collectively with Focus Media, “Respondents”). 

II.

In anticipation of the institution of these proceedings, Respondents have submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over them and the subject matter of these 

proceedings, which are admitted, and except as provided herein in Section V, Respondents consent

to the entry of this Cease and Desist Order (“Order”), as set forth below. 
2

III.

On the basis of this Order and Respondents’ Offer, the Commission finds1that:

Summary

1. These proceedings concern Focus Media’s and its founder and Chief 

Executive Officer Jiang’s negligent failure to disclose accurate information concerning Focus 

Media’s partial sale of securities in its wholly-owned subsidiary Allyes Online Media Holdings 

Ltd. (“Allyes”) to certain Allyes and Focus Media insiders at a favorable price, months before 

both the insiders and Focus Media sold their interests in Allyes to a private equity firm at nearly 

six times the price the Allyes and Focus Media insiders had paid.

Respondents

2. Focus Media is a Cayman Islands corporation headquartered in Hong 

Kong, with substantially all of its business operations located in mainland China. During the 

relevant time period, Focus Media’s common stock was registered with the Commission 

pursuant to Section 12(b) of the Exchange Act, and its American Depository Shares traded on the 

Nasdaq Global Market. Subsequently, on June 3, 2013, Focus Media Filed a Form 15 that 

provided notice of termination of its registration with the Commission. 

3. Jason Jiang, a citizen of Singapore, is the founder of Focus Media, has 

been the Chairman of the board of directors of Focus Media since its founding, and, during the 

relevant time period, was CEO of Focus Media. 

Background

4. Focus Media is a China-based advertising company that concentrates in 

what is often called Out-of-Home advertising. Such advertising includes traditional and digital 

displays in public places, such as building lobbies, elevators, stores, and outdoor locations. At 

the end of 2009, Focus Media had operations that included an LCD display network and poster 

frame network for selling ads in commercial and residential buildings; an “In-store” network for 

selling ads in retail spaces; selling advertising time on movie screens; outdoor billboards; and an 

internet advertising network. Focus Media conducted its internet advertising business through its 

wholly-owned Allyes subsidiary. In 2009, the Allyes internet advertising business accounted for 

21.4% of Focus Media’s total revenues.

 

5. On March 22, 2010, Focus Media publicly reported annual and fourthquarter 2009 earnings through a Form 6-K filing. The filing also disclosed that during the first 

 

1 The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding 

on any other person or entity in this or any other proceeding.
3

quarter of 2010 Focus Media sold a part of its Allyes business in what was described as a 

“Management Buy-Out” (“MBO”): “Certain Allyes employees and management and directors 

and certain members of the Company’s management and directors recently entered into a 

definitive agreement with the Company and Allyes in January 2010 to buy-out an aggregate 38%

interest in Allyes from the Company.” Jiang was the largest individual purchaser in the MBO. 

The MBO purchase price, as also disclosed in the Form 6-K, was $13.3 million, which 

represented an implied valuation for the entire Allyes entity of approximately $35 million. The 

stated reason for the MBO was that it was “part of initiatives being taken by the Company to 

incentivize management to enhance the future business model of Allyes and thereby to seek 

long-term sustainable growth for the Company and investors.” Focus Media also stated that the 

purchase price was based upon, inter alia, an independent third-party valuation report. 

6. On July 16, 2010, Focus Media filed an amended annual report for 2009 

on a Form 20-F. The Form 20-F/A repeated the description of the MBO, and stated that the price 

paid in the MBO approximated fair value. In addition, the Form 20-F/A reiterated that the MBO 

was part of initiatives undertaken to incentivize management to enhance the future business 

model of Allyes and thereby increase shareholder value. Respondent Jiang signed the Form 20-

F/A as Chairman and CEO of Focus Media. 

7. Two weeks later, on July 30, 2010, Focus Media publicly announced that, 

a private equity firm (“Acquiror”), had agreed to acquire a controlling stake in Allyes from 

Focus Media and the other shareholders. The disclosed $124 million purchase price for Focus 

Media’s remaining 62% interest in Allyes represented an implied valuation of $200 million for 

the entire Allyes entity. 

8. As indicated by the following sequence of events, Focus Media’s public 

disclosures inaccurately described the circumstances concerning the MBO and the Acquiror

transactions. 

9. In the fall of 2009, Focus Media and Allyes management were considering 

various structures for a restricted share plan, in order to incentivize Allyes management to 

continue working at Allyes (particularly in light of significant departures of senior Allyes 

personnel that had occurred in the preceding year) and assist in a turnaround of the business. It 

was contemplated that participants in such a plan could thereafter participate in any ultimate 

disposition (i.e., sale or IPO) of Allyes. In a Power Point presentation received by Jiang and 

others on September 22, 2009, three restricted share issuance proposals were outlined, with a 

higher ultimate sales or IPO price for Allyes resulting in a higher incentive percentage of 

restricted share issuances: 6.7% for a disposition at $150 million, 8.4% for a disposition at $200 

million, and 10% for a disposition at $250 million. 

10. On October 15, 2009, Jiang and others received an email from an Allyes 

officer summarizing a proposed allocation, which the Allyes officer described as having been 

authorized by the Focus Media board, for an issuance of approximately 8.1 million restricted 

Allyes shares (equaling 7.5% of the outstanding post-issuance share balance), the majority of 
4

which would be allocated to Allyes management and employees. Less than 10% of the newly 

issued shares were identified as being allocated to Focus Media management and employees, 

with the largest identified Focus Media recipient (Jiang) to hold 0.5% of Allyes. Unlike with 

what ultimately happened in the MBO, in this earlier proposal, restricted share recipients were to 

pay nothing for their shares. Focus Media records reflect that a majority of the Board’s 

Compensation Committee members approved the share allocation plan shortly thereafter. 

11. In October and November 2009, documents were circulated among Focus 

Media and Allyes personnel, including in some instances Jiang, describing a plan for an “AShare IPO,” referring to a public offering on the Shanghai Stock Exchange, to be launched 

potentially in 2011, pursuant to which plan management would hold 20% of the listed entity at 

the time of the eventual IPO.

12. Towards the end of November 2009, an Acquiror representative reached 

out to Allyes to discuss a possible acquisition of the company. A meeting was scheduled 

between senior representatives of Acquiror and Allyes for November 30, 2009. By December 1, 

2009, Allyes and Acquiror executed a non-disclosure agreement concerning a potential 

transaction, and Allyes provided confidential financial information to Acquiror in connection 

with the potential transaction. 

13. On December 4, 2009, Allyes management circulated to Jiang and others a 

draft presentation for the Focus Media board concerning the potential Allyes IPO. Unlike prior 

versions of draft IPO presentations, this version provided for management to abandon the 7.5% 

restricted equity plan previously approved by a majority of Focus Media’s Compensation 

Committee. Instead, the presentation proposed that management purchase a 19% stake of Allyes 

based on a $35 million enterprise valuation. The presentation was circulated to the Focus Media 

board in advance of its December 6, 2009 board meeting. 

14. On December 6, 2009, the Focus Media board met. There are two 

apparently “final,” contradictory versions of the minutes. Neither set of minutes reflects any 

discussion of an IPO transaction for Allyes. Instead, one version of the board’s minutes reflects 

that the management of Allyes and Focus Media “proposed that they intend to purchase up to 

38% equity of Allyes,” and that the “buy-out proposal” was approved, with Allyes and Focus 

Media management and employees authorized to purchase no more than 38% of Allyes at a 

valuation of no less than “Allyes current valuation USD 35 million.” This set of board minutes, 

for a meeting days after Allyes and Acquiror entered into a non-disclosure agreement, is the first 

Focus Media document to refer to an MBO with a buyout of 38% of Allyes. Another version of 

the board’s minutes from the same meeting does not mention the MBO at all. 

15. On December 6, 2009, the same day as the Focus Media board meeting in 

which the MBO was apparently approved at an implied valuation of $35 million, internal 

Acquiror documents reflect Acquiror’s understanding that Allyes management “has guided 

towards a valuation between $200M and $300M.” 
5

16. Later in December, Acquiror and Allyes conducted discussions 

concerning a possible acquisition of Allyes, which included a discussion of a potential 

acquisition price range of $150-200 million. Further deal discussions between the parties did not 

occur at that time and Acquiror business records reflect that this was at Allyes’s request, 

because Allyes asked Acquiror to “hold off the deal” for the MBO to be finalized. 

17. In contrast to what his participation in the Allyes restricted share plan 

would have been, initial Focus Media drafts for the MBO agreement reflect that approximately

half of the 38% participation was to go to Jiang.

18. After various drafts of the MBO agreement circulated internally at Focus 

Media in January and February 2010, the Focus Media board met on March 15, 2010, and 

ratified the MBO. Although Focus Media’s contemporaneous emails refer to the board’s 

ratification of the MBO at the March 15, 2010 board meeting, the board minutes for that meeting

do not themselves reflect any mention of the MBO. 

19. On March 18, 2010, three days after the Focus Media board meeting in 

which the MBO was purportedly ratified, a senior officer of Focus Media called outside counsel 

to discuss possible representation of Focus Media in a sale of Allyes to Acquiror. That same 

day, Acquiror business records reflect that Allyes and Acquiror management had spoken again. 

Later that month, Acquiror records reflect its understanding that “[d]eal looks something like 

200M equity, 160-ish E[nterprise] V[alue],” and that they had been informed of a desire to close 

in July “for understandable reasons.”

20. Less than four months later on July 30, 2010, Focus Media publicly 

announced that Acquiror had agreed to acquire a controlling stake in Allyes from Focus Media 

and the other shareholders. The disclosed $124 million purchase price for Focus Media’s 

remaining 62% interest in Allyes represented an enterprise valuation of $200 million for Allyes. 

21. Although Focus Media and Jiang maintain that they had no knowledge 

that there had been any discussions between Allyes management and Acquiror regarding the sale 

of Allyes for $200 million before the MBO was approved, they ignored numerous red flags that 

should have alerted them to this situation.

Red Flags

The MBO Participants

22. Focus Media stated in its public filings that the purpose of the MBO was 

to incentivize Allyes management to assist in a turnaround of the business. However, as a result 

of the sale to Acquiror following the MBO, the largest beneficiary of the MBO was Jiang by 

virtue of his percentage share. 

23. Although Focus Media and Jiang attributed the size of Focus Media 
6

management’s participation in the MBO (greater than 40%) to Allyes management’s insistence 

that Focus Media management share the risk of the incentivization program, the fact that a 

program intended to incentivize Allyes management resulted in such substantial short-term gains

to the Focus Media CEO warranted deeper scrutiny into whether a potential deal may have been 

available to Allyes at the time the structure of the MBO was first under consideration. The need 

for such scrutiny was heightened with respect to subsequent public filings because a Focus 

Media director became aware that Jiang had approved payment of a $2.6 million finder’s fee to 

an Allyes officer for bringing the Acquiror deal to Focus Media. Jiang approved the fee without 

full disclosure to the Focus Media Board. 

24. Similarly, although the stated purpose of the MBO was to incentivize 

Allyes management, two of the MBO participants were British Virgin Island-incorporated 

entities purportedly owned by individuals who had been retained by Allyes as consultants—not 

employees—in November 2009 shortly before the MBO. There is no indication in Focus 

Media’s records that these consultants actually performed work on behalf of Allyes, and Focus 

Media’s records do not reflect any inquiry by any member of the Focus Media board, including 

Jiang, concerning the basis for providing those individuals with the opportunity to purchase 

MBO shares. Moreover, Jiang, having been asked by an Allyes representative to lend a BVI 

entity money so that it would be able to purchase the shares, funded the participation of one of 

the BVI entities. Jiang’s loan was subsequently repaid in cash, by that Allyes representative 

after the Acquiror transaction closed.

The Price Difference Between the MBO and the Acquiror Transaction

25. Although Focus Media received an appraisal supporting the $35 million 

MBO valuation, contemporaneous internal discussions regarding an ultimate sale or IPO of 

Allyes in the range of $150 to $250 million should have led Focus Media and Jiang to question 

the company’s reliance on that valuation only months before Allyes was indeed sold to Acquiror

for $200 million.

The Failure to Notice and Act on Evidence of Prior Communications with Acquiror

26. After the Focus Media officer became aware in March 2010 that 

negotiations were occurring with Acquiror, there is no indication that Focus Media took any

steps to determine when those discussions had first started, and what the content of those 

discussions had been. In addition, in July 2010, another Focus Media officer failed to notice a 

reference to the pre-MBO December 1, 2009 non-disclosure agreement between Allyes and 

Acquiror in a deal-related document being circulated by email. 

The Lack of Appropriate Corporate Formalities

27. Focus Media’s records do not indicate at what date the company bound 

itself to the MBO, and the agreement was still being circulated for signature to certain purchasers 

up until July 28, 2010. One of the participants did not fund the MBO until late June 2010, one 

week after Acquiror executed a Term Sheet, purportedly because nobody had asked for the 
7

money. And a number of Focus Media employees who ended up receiving proceeds arising 

from the sale to Acquiror of interests purchased in the MBO, were not parties to the MBO 

agreement. 

28. The lack of formality in executing and funding the MBO, together with 

the undocumented receipt of proceeds by Focus Media employees, should have subjected the 

MBO and the ultimate sale to Acquiror to greater scrutiny into whether there was any connection 

between the two events.

29. Moreover, and as explained above, Focus Media’s board minutes 

concerning the sale of the Allyes asset in the MBO are both inconsistent and incomplete. With 

respect to the Focus Media board meeting of December 6, 2009, the company’s records contain 

two purportedly “final” versions of board minutes, one mentioning board approval of the MBO 

and one not mentioning the MBO at all. With respect to the Focus Media board meeting of 

March 15, 2010, the company’s board minutes do not mention the MBO at all, even though other 

records reflect that the board voted on and approved the transaction during that meeting. With 

respect to a Focus Media board meeting of July 10, 2010, at which the potential sale to Acquiror

was purportedly discussed, the company’s records do not contain any board minutes from that 

meeting.

30. Certain of Focus Media’s SEC filings, including filings signed by Jiang,

concerning the MBO and the sale of Allyes to Acquiror were materially misleading in that they 

contained unqualified statements that the MBO was undertaken at a price approximating fair 

value and in order to incentivize management to seek long-term sustainable growth. At the time, 

however, Focus Media and Jiang could have accessed information indicating the inaccuracy of 

those statements. Had they inquired further into the circumstances surrounding the MBO based 

on the red flags described above, they would have uncovered the following information: (i) that 

the MBO was finalized after Acquiror and Allyes had engaged in discussions concerning a sale 

of Allyes in December at a $200 million price that was multiples of the MBO price; and (ii) that 

consultants and other non-disclosed parties took part in the MBO. Focus Media’s material 

misrepresentations and omissions were repeated in numerous company filings, including filings 

related to the secondary offering of ADRs into the market on September 7, 2010.

31. Jiang’s and Focus Media’s failure to exercise an appropriate level of care 

in scrutinizing the MBO resulted in the Focus Media Board receiving materially inaccurate 

information regarding the MBO. 

Violations

32. As a result of the conduct described above, Focus Media and Jiang 

violated Section 17(a)(2) of the Securities Act, which prohibits obtaining money or property by 

means of any untrue statement of a material fact or any omission to state a material fact 

necessary in order to make the statements made, in light of the circumstances under which they 
8

were made, not misleading.2

33. As a result of the conduct described above, Focus Media violated Section 

13(b)(2)(A) of the Exchange Act, which requires reporting companies to make and keep books, 

records, and accounts which, in reasonable detail, accurately and fairly reflect their transactions 

and dispositions of their assets.

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondents’ Offers.

Accordingly, it is hereby ORDERED that: 

A. Pursuant to Section 8A of the Securities Act, Respondents Focus Media and Jiang 

cease and desist from committing or causing any violations and any future violations of Sections 

17(a)(2) of the Securities Act. Pursuant to Section 21C of the Exchange Act, Respondent Focus 

Media cease and desist from committing or causing any violations and any future violations of 

Section 13(b)(2)(A) of the Exchange Act.

B. Respondent Focus Media shall within 30 days of the entry of this Order, pay a civil 

money penalty in the amount of $34,600,000 to the Securities and Exchange Commission. If 

timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 3717. Payment 

must be made in one of the following ways: 

(1) Respondent Focus Media may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent Focus Media may make direct payment from a bank account via 

Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

(3) Respondent Focus Media may pay by certified check, bank cashier’s check, or 

United States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

 

2 A violation of Section 17(a)(2) may be established by a showing of negligent conduct. Aaron v. 

SEC, 446 U.S. 680, 696-97 (1980). 
9

Payments by check or money order must be accompanied by a cover letter identifying 

Focus Media as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to Andrew M. Calamari, Division 

of Enforcement, Securities and Exchange Commission, New York Regional Office, 200 Vesey 

Street, New York, New York 10128. 

C. Respondent Jiang shall, within 30 days of the entry of this Order, pay a civil money 

penalty in the amount of $9,690,000; disgorgement of $9,690,000; and prejudgment interest on the 

amount to be disgorged of $1,647,865.43 to the Securities and Exchange Commission. If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 3717 and Commission 

Rule of Practice, Rule 600. Payment must be made in one of the following Payment must be made 

in one of the following ways: 

(1) Respondent Jiang may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent Jiang may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

(3) Respondent Jiang may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying 

Jiang as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 

cover letter and check or money order must be sent to Andrew M. Calamari, Division of 

Enforcement, Securities and Exchange Commission, New York Regional Office, 200 Vesey Street, 

New York, New York 10128. 

D. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, a Fair 

Fund is created for the disgorgement, interest and/or penalties referenced in paragraphs B and C 

above. Regardless of whether any such Fair Fund distribution is made, amounts ordered to be paid 

as civil money penalties pursuant to this Order shall be treated as penalties paid to the government 

for all purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, 

Respondents agrees that in any Related Investor Action, they shall not argue that Respondents are 

entitled to, nor shall they benefit by, offset or reduction of any award of compensatory damages by 

the amount of any part of Respondents’ payments of a civil penalty in this action (“Penalty 

Offset”). If the court in any Related Investor Action grants such a Penalty Offset, Respondents 

agrees that they shall, within 30 days after entry of a final order granting the Penalty Offset, notify 
10

the Commission's counsel in this action and pay the amount of the Penalty Offset to the Securities 

and Exchange Commission. Such a payment shall not be deemed an additional civil penalty and 

shall not be deemed to change the amount of the civil penalty imposed in this proceeding. For 

purposes of this paragraph, a “Related Investor Action” means a private damages action brought 

against Respondents by or on behalf of one or more investors based on substantially the same facts 

as alleged in the Order instituted by the Commission in this proceeding.

V.

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523 with respect to Respondent Jiang, the findings in this 

Order are true and admitted by Respondent Jiang, and further, any debt for disgorgement, 

prejudgment interest, civil penalty or other amounts due by Respondent Jiang under this Order or 

any other judgment, order, consent order, decree or settlement agreement entered in connection 

with this proceeding, is a debt for the violation by Respondent Jiang of the federal securities laws 

or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the 

Bankruptcy Code, 11 U.S.C. §523(a)(19).

By the Commission.

Brent J. Fields

Secretary