Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Longwei Petroleum Investment Holdin
Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Longwei Petroleum Investment Holding Limited
NEW YORK--(BUSINESS WIRE)-- Robbins Geller Rudman & Dowd LLP ("Robbins Geller") (http://www.rgrdlaw.com/cases/longwei/) today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Longwei Petroleum Investment Holding Limited ("Longwei") (NYS: LPH) common stock during the period between May 17, 2010 and January 3, 2013 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from January 4, 2013. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/longwei/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Longwei and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Longwei is an energy company based in the People's Republic of China that engages in the wholesale distribution of finished petroleum products.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company's financial performance and future prospects. Specifically, it alleges that defendants misrepresented and/or failed to disclose the following adverse facts: (a) that, contrary to Longwei's Class Period statements that it had taken action to provide shareholders with more transparent disclosures and to keep investors better "informed" as to corporate activities and the Company's financial condition, Longwei's Class Period financial reports and statements contained false and misleading statements and omissions; (b) that, contrary to Longwei's Class Period statements that it had intentionally increased inventory of crude products "to take advantage of additional product purchases during a period of fluctuating prices," the Company's inventory "on-hand" was increasing during the Class Period because the Company was experiencing lower demand and decreasing sales; (c) that, contrary to Longwei's Class Period statements that it was funding its corporate acquisitions of additional operating facilities, including the acquisition of a facility from Huajie Petroleum Co., Ltd., from "operating cash flow from operations," Longwei was instead obtaining and funding these acquisitions with the millions of dollars being generated through the exercise of warrants to acquire Longwei stock issued in its October 2009 private placement; (d) that, contrary to Longwei's Class Period reports of strong demand fueling quarter after quarter of "record revenues," Longwei's facilities in the cities of Taiyuan and Gujiao in China's Shanxi Province were not operating as profitably as represented by Longwei during the Class Period; (e) that, contrary to Longwei's Class Period financial reports filed with the SEC, Longwei was not disclosing a $32 million investment in a tourism business made by its subsidiary Shanxi Zhonghe Energy Conversion Co., Ltd.; (f) that, contrary to Longwei's description of its Class Period corporate acquisitions, Ming Zhao and Puda Coal Group had undisclosed ties to Longwei's Zhonghe and Huajie facility acquisitions; (g) that, contrary to Longwei's statements that its Class Period financial reports complied with Generally Accepted Accounting Principals, a minority interest in Longwei's Taiyuan Facility owned by defendant Cai Yongjun, Longwei's founder, CEO and Chairman, was not reflected in the Company's balance sheet as a non-controlling interest during the Class Period; (h) though Longwei's 2011 Annual Report stated that Longwei's wholly-owned subsidiary Shanxi Heitan Zhingyou Petrochemical Co., Ltd. was an operating subsidiary with taxable income during fiscal 2011, the Company's 2012 Annual Report would state that Zhingyou was a non-operating subsidiary during fiscal 2012 and that Zhingyou generated no taxable income for Longwei during fiscal 2011; (i) though Longwei's 2011 Annual Report stated that Zhingyou reported operations at its Gujiao Facility during fiscal 2011, the Company's Tax Reconciliation Report filed on June 29, 2012 for the calendar year 2011 stated that Longwei operating subsidiary Taiyuan Longwei Economic & Trade Co., Ltd. was Longwei's only facility that generated taxable revenue and paid income tax and VAT tax for calendar year 2011; (j) that, as a result of the foregoing, Longwei was not on track to "repeat the success of [Longwei's 2007] Gujiao acquisition with the near-term closing of the assets of the Huajie facility" or to "nearly double [its] overall capacity"; and (k) that, as a result of the foregoing, contrary to its repeated Class Period statements, Longwei was not on track to achieve $70 million in net income on $500 million in revenues in fiscal 2011 or $78 million in net income on $576 million in revenues in fiscal 2012.
On January 3, 2013, GeoInvesting.com published a report exposing the fraud perpetrated by Longwei. The complaint alleges that the Company's stock price was hammered on the publication of GeoInvesting.com's expose, with the trading price of Longwei common stock falling more than 72% from its opening price of $2.29 that day to a closing price of $0.62, on extremely high trading volume.
Plaintiff seeks to recover damages on behalf of all purchasers of Longwei common stock during the Class Period (the "Class"). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller represents U.S. and international institutional investors in contingency-based securities and corporate litigation. With nearly 200 lawyers in nine offices, the firm represents hundreds of public and multi-employer pension funds with combined assets under management in excess of $2 trillion. The firm has obtained many of the largest recoveries and has been ranked number one in the number of shareholder class action recoveries in MSCI's Top SCAS 50 every year since 2003. According to Cornerstone Research, the firm's recoveries have averaged 35% above the median for all firms over the past seven years (2005-2011). Please visit http://www.rgrdlaw.com for more information.
Robbins Geller Rudman & Dowd LLP
Samuel H. Rudman, 800-449-4900
David A. Rosenfeld
KEYWORDS: United States North America New York
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