NEW ORLEANS, May 21, 2007 (PRIME NEWSWIRE) -- Kahn Gauthier Swick, LLC ("KGS") announces that it has initiated an investigation into Xinhua Finance Media Ltd. ("Xinhua" or the "Company") (Nasdaq:XFML) to determine whether it has violated federal securities laws by selling at least $300 million in stock pursuant to a materially false and misleading prospectus in or about March 9, 2007, and by subsequently issuing a series of materially false and misleading statements to shareholders.
Shares of Xinhua have fallen from a high of $12.75 per share on May 7, 2007 to an intraday low of $8.31 per share today in the wake of news that the Company's former CFO at the time of its IPO, Shelly Singhal, was simultaneously an investment banker and stockbroker in charge of Bedrock Securities ("Bedrock"). Since April 2006, prior to the IPO, Bedrock has been under a cease-and-desist order for violating SEC regulations. Moreover, reports have also surfaced that Singhal has been fighting a private civil racketeering lawsuit in California and has previously been a major investor in AremisSoft and ACLN, companies previously sued for fraud by the SEC.
In the wake of this news, on Friday, May 18, 2007, Xinhua Proxy advisor Glass Lewis & Co.'s head of research, Lynn E. Turner, resigned. Previously, Turner was a respected accounting regulator with the SEC. Prior to this news, on May 16, 2007, Glass Lewis' managing director and research editor, Jonathan Weil, resigned. Weil was previously with the Wall Street Journal, better known as the first reporter to blow the whistle on Enron.
If you are a Xinhua shareholder or purchased shares in its IPO or shortly thereafter, and have information that might assist in our investigation, or would like to discuss your legal rights, you may e-mail or call KGS, without obligation or cost to you. You may contact Managing Partner Lewis Kahn of KGS direct, toll free 1-866-467-1400, ext., 100, or by email at lewis.kahn@kgscounsel.com. KGS focuses its practice on securities fraud litigation, and the firm's lawyers have significant experience working on securities fraud cases that have resulted in significant recoveries for shareholders. For more information on KGS, please visit www.kgscounsel.com.