A class action has been filed in the United States District Court for the Central District of California on behalf of investors who purchased China Agritech, Inc. ("China Agritech" or the "Company") (NASDAQ: CAGC) common stock between the period of February 8, 2010 through March 11, 2011, inclusive (the "Class Period").
The Complaint alleges China Agritech issued materially false and misleading financial statements. Particularly, the Complaint alleges that on or about February 3, 2011, analyst firm LM Research issued a report (the "Report") alleging, among other things, that the Company's statement of revenue and earnings for the fiscal year 2009 are materially false and misleading. The Report, citing sources, claims that China Agritech's U.S. financial statements were materially different than the financial statements filed with Chinese authorities by a number of the Company's subsidiaries. The report claims that the revenue reported in the Company's SEC filings for 2009 is ten times larger than what the Chinese regulatory reports show. The LM Research report also noted a number of potential badges of fraud within the Company. The Complaint alleges that when these disclosures of potential fraud concerning China Agritech were revealed to the market, the price of China Agritech stock dropped, damaging investors.
After the close of trading on March 11, 2011, NASDAQ announced that it was halting trading due to the pending release of news. On March 14, 2011, the Company issued a release announcing the resignation of its independent outside auditor, Ernst & Young Hua Ming. The Company announced that it formed a Special Committee to investigate accounting irregularities and delayed the filing of it 10-K report to the Securities and Exchange Commission. The stock has yet to re-open for trading.
If you are a current shareholder and purchased during the period February 8, 2010 through March 11, 2011 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.