METAIRIE, La., Sept. 17, 2007 (PRIME NEWSWIRE) -- Law Offices of Eric J. O'Bell, LLC ("O'Bell, LLC") has filed a class action lawsuit against China Sunergy Co., Ltd. ("China Sunergy" or the "Company") (Nasdaq:CSUN) in the United States District Court for the Southern District of New York, on behalf of shareholders who purchased the common stock of China Sunergy in connection with the Company's IPO on or about May 17, 2007, or who purchased shares thereafter in the open market.
China Sunergy, certain of its officers and directors, and the Company's underwriters are charged with including, or allowing the inclusion of, materially false and misleading statements in the Registration Statement and Prospectus issued in connection with the IPO, in violation of the Securities Act of 1933.
Particularly, the Complaint charges that China Sunergy raised over $107.52 million through the issuance of 9.775 million shares, despite the Registration Statement's false and misleading statements that the Company: (1) was a "leading manufacturer of solar cell products, as measured by production capacity" that was experiencing remarkable revenue growth; and (2) had secured a sufficient supply of polysilicon, a raw material necessary to the continued production of its solar cell products. Yet at the time of the IPO and unbeknownst to shareholders, the Registration Statement failed to disclose that China Sunergy was already having difficulty obtaining a sufficient supply of polysilicon, which foreseeably would have a near-term adverse impact on earnings.
On July 3, 2007, only weeks after the IPO, China Sunergy issued a press release announcing preliminary results for 2Q:07 well below guidance, and claimed that it could suddenly not obtain critical raw materials necessary for production and its revenue goals. The Company's press release stated that "the relatively tight supply of polysilicon affected the quality, quantity and delivery of wafers and drove up overall wafer prices in the spot market, resulting in increased pressure on China Sunergy's margins."
On this news, shares of China Sunergy fell nearly 25% in a single trading day, from a high of $14.90 on July 2, 2007, to a close of $11.28 the following day, on exceedingly high volume of 3.659 million shares. As the impact of China Sunergy's belated disclosures resonated in the market, shares of the Company continued to decline, to about $7.50 per share by August 23, 2007. Shares fell significantly lower days later, to below $5.00 per share -- on news that the Company's CFO was resigning -- after China Sunergy revealed a loss of at least $.14 per share for 2Q:07. In all, China Sunergy shares fell from $16.70 per share from the highs following the IPO, to a low of below $5.00 per share -- all within approximately 10 weeks.
If you wish to serve as lead plaintiff in this class action lawsuit, you must move the Court no later than November 9, 2007. Any member of the purported 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. If you would like to discuss your legal rights, you may e-mail or call Eric J. O'Bell at the Law Offices of Eric J. O'Bell, LLC, without obligation or cost to you at 1-504-456-8677, or by email at ejo@obelllawfirm.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca