Law Offices of Howard G. Smith announces that a class action lawsuit has been filed against SinoTech Energy Limited (“SinoTech” or the “Company”) (NASDAQ:CTE - News) in the United States District Court for the Southern District of New York on behalf of a class consisting of all persons who purchased American Depository Shares (“ADSs”) of SinoTech pursuant and/or traceable to the Company’s Registration Statement and Prospectus issued in connection with the Company’s initial public offering (the “IPO”) on November 3, 2010, including open-market purchasers of SinoTech ADSs between November 3, 2010 and August 16, 2011, inclusive (the “Class Period”).
The Complaint charges SinoTech, certain of the Company’s current and former executive officers and directors, and the underwriters of its IPO with violations of the Securities Act of 1933. SinoTech provides enhanced oil recovery services to oil companies in the People's Republic of China. The Complaint alleges that certain representations made in the Company’s Registration Statement and Prospectus issued in connection with the IPO were materially inaccurate. Specifically, the Complaint alleges that the Company’s reported sales and revenues were materially inaccurate, because the nature, size and scope of the Company’s business was materially exaggerated.
On August 16, 2011, a research report was published on the Internet questioning SinoTech’s previously issued financial statements and future prospects. The report alleged that: (1) SinoTech’s sole import agent, accounting for over $100 million worth of oil drilling equipment orders, appears to be an empty shell company with no sign of operation, a limited import history and negligible revenue base; (2) the Company’s only chemical supplier is an empty shell company, with little or no revenues; (3) the Company’s five largest subcontracting customers, which provide the vast majority of SinoTech’s revenues, appear to be shell companies with unverifiable operations with minimal revenues; (4) the financial statements SinoTech issued in the United States are inconsistent with similar filings the Company made in China; and (5) the Company has engaged in undisclosed related-party transactions.
On this news, ADSs of SinoTech declined more than 40%, to close on August 16, 2011, at $2.35 per share. Thereafter, NASDAQ halted trading of the Company’s stock.
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased ADSs of SinoTech between November 3, 2010 and August 16, 2011, you have certain rights, and have until October 18, 2011, to move for lead plaintiff status. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice.
If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215)638-4847, Toll-Free at (888)638-4847, by email to howardsmith@howardsmithlaw.com or visit our website at http://www.howardsmithlaw.com. |
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