ERJ staff report (DS)
New York -- A New York law firm, Pomerantz Haudek Grossman & Gross LLP, has filed a class action lawsuit against ShengdaTech, Inc. and certain of its officers. The class action (11 Civ. 1996), pending in the Southern District of New York, is on behalf of a class of all persons or entities who purchased or otherwise acquired ShengdaTech securities during the period from May 10, 2010 through and including March 14, 2011 (the "Class Period"). The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The Complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects.
On March 15, 2011, the Company shocked the market with the disclosure "that it 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." Upon this disclosure, Nasdaq halted trading of ShengdaTech shares at $3.55.
Defendant ShengdaTech manufactures and markets speciality additives. The Company's nano precipitated calcium carbonate products are sold to its customers in the tyre, polyvinyl chloride building materials, ink, paint, latex, adhesive, paper and polyethylene industries.
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Press release from Pomerantz