A class action has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of ShengdaTech, Inc. (NasdaqGS: SDTH) common stock during the period between March 15, 2010 and March 15, 2011 (the “Class Period”). The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that ShengdaTech was operating with material deficiencies in the system of internal control over its financial reporting; (b) that ShengdaTech’s financial statements, during at least 2010, were not fairly presented in conformity with U.S. GAAP and were materially false and misleading; and (c) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about ShengdaTech’s revenues, expenses, income, margins, markets, growth, average selling prices, and customers.
On March 15, 2011, the Company issued a press release announcing that it had appointed a special committee of the Board of Directors to investigate “potentially serious discrepancies and unexplained issues relating to the Company and its subsidiaries’ financial records identified by the Company’s auditors” in the course of their examination of ShengdaTech’s consolidated financial statements for the year ended December 31, 2010. The Company further announced that its audit committee had retained O’Melveny & Myers LLP as independent outside counsel, which had initiated an internal investigation, that the SEC had been notified about the commencement of the internal investigation, and that the Company would not file its 2010 Form 10-K in a timely manner. In response to this unexpected announcement, trading in the Company’s shares was suspended.
If you are a current shareholder and purchased during the period March 15, 2010 and March 15, 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.