Puda Coal, Inc
Class Period: Sep 15, 2009 to Apr 11, 2011
Lead Plaintiff Deadline: Jun 13, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against Puda Coal, Inc. ('Puda" or the "Company") on behalf of all persons or entities who purchased the common stock of Puda from November 13, 2009 through April 11, 2011. This case has been filed in the USDC - New York (Southern).
The Complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company's true financial condition, business and prospects. Specifically, the complaint alleges: (i) that, prior to the beginning of the Class Period, certain of the individual defendants fraudulently transferred Puda's ownership interest to defendant Ming Zhao; (ii) that Puda was nothing more than a shell company during the Class Period; (iii) that Puda's reported operating results and financial condition were materially overstated; (iv) that Puda's financial statements were not fairly presented in conformity with U.S. Generally Accepted Accounting Principles and were materially false and misleading; (v) that Puda was operating with material deficiencies in its system of internal control over its financial reporting; and (vi) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.
On April 8, 2011, Puda issued a press release announcing that it was currently reviewing the allegations regarding improper share transactions by defendant Ming Zhao, which were published in an article entitled "Puda Coal Chairman Secretly Sold Half the Company and Pledged the Other Half to Chinese PE Investors" by a short-seller that same day. In reaction to the short-seller's article and the Company's press release, shares of the Company's stock declined more than 34% on April 8, 2011, on extremely heavy trading volume.
On April 11, 2011, Puda announced that it had unanimously ratified the Audit Committee's decision to launch a full investigation into the allegations raised in the short-seller's article alleging various unauthorized transactions in the shares of a subsidiary company, Shanxi Coal. The April 11, 2011 press release noted that, "[a]lthough the investigation is in its preliminary stages, evidence supports the allegation that there were transfers by Mr. Zhao in subsidiary ownership that were inconsistent with disclosure made by the Company in its public securities filings. Mr. Zhao has agreed to a voluntarily [sic] leave of absence as Chairman of the Board of the Company until the investigation is complete." In response to the above announcement, trading in the Company's stock was halted on April 11, 2011.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.