Kaplan Fox Files Securities Class Action on Behalf of Purchasers of Puda Coal

01 May 2011 | 04:22 Code : 20588 Geoscience events
Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit against Puda....

Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit against Puda Coal, Inc. ("Puda Coal" or the "Company") (NYSE Amex: PUDA) that alleges violations of the Securities Exchange Act of 1934 and the Securities Act of 1933 on behalf of purchasers of Puda Coal common stock during the period September 15, 2009 through April 8, 2011, inclusive, including investors who purchased Puda Coal common stock in the Company’s December 8, 2010 public offering of common stock (the "Class"). The case is pending in the United States District Court for the Southern District of New York. A copy of the complaint may be obtained from Kaplan Fox or the Court. The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements to investors by misrepresenting and failing to disclose that: (1) Puda Coal’s ownership interest in certain key Company assets, most notably the Company’s key operating subsidiary, Shanxi Coal, had been wrongfully transferred to defendant Zhao, (2) as a result of the wrongful transfer of Puda Coal’s ownership interest in Shanxi Coal, its core operating subsidiary, Puda Coal’s assets and corresponding value was materially diminished, (3) Puda Coal’s operating results and financial condition were materially misstated, (4) the Company had material deficiencies in its internal controls over its financial reporting, (5) the Company’s financial statements were materially false and misleading and not presented in accordance with generally accepted accounting principles ("GAAP"), and (6) Defendants had no reasonable basis for their positive statements about Puda Coal’s business and financial results. The Complaint alleges that on April 8, 2011, Puda Coal did not deny certain publicly circulated allegations about the Company, but responded in a press release that stated, in part, that the Company was "currently reviewing the allegations regarding improper share transactions by the Company’s Chairman, Mr. Ming Zhao." On April 8, 2011 shares of Puda Coal declined by $3.10 per share, more than 34%, to close at $6 per share on heavier than usual volume. The Complaint further alleges that on April 11, 2011, before the market opened, Puda Coal issued a press release announcing the commencement of an investigation into "the allegations raised in a recent article alleging various unauthorized transactions in the shares of a subsidiary company, Shanxi Coal," admitting that it had already found evidence of transfers by Defendant Zhao inconsistent with its public securities filings, and indicating that Defendant Zhao was taking a leave of absence immediately as Chairman of the Board of the Company. The Complaint further alleges that since the April 11, 2011 disclosure, Puda Coal’s stock continues to be halted by the New York Stock Exchange rendering it effectively worthless to its shareholders who are unable to sell the Company’s stock. If you are a member of the proposed Class, you may move the court no later than June 13, 2011 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery. Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, or to review a copy of the complaint filed in this action, you may visit our website at www.kaplanfox.com.

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