Law Offices of Howard G. Smith Announces Class Action Lawsuit Against SinoTech Energy Limited
21 August 2011 - 2:30PM
Business Wire
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) 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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