NEW YORK, Sept. 28, 2011 (GLOBE NEWSWIRE) -- Pomerantz Haudek Grossman & Gross LLP is investigating claims on behalf of investors of SinoTech Energy Limited ("SinoTech" or the "Company") who purchased SinoTech shares from November 3, 2010 through August 16, 2011. Such investors are advised to contact Rachelle R. Boyle at rrboyle@pomlaw.com or 888-476-6529, ext. 350.
The investigation concerns whether SinoTech violated federal securities laws by issuing materially inaccurate information about the Company's financial performance. On August 16, 2011, a report ("Report") was issued by the Alfred Little website demonstrating that the Company's business was smaller than it had represented to investors in its SEC filings. The Report found, among other things, that: (1) the Company's sole import agent, who accounted for more than $100 million worth of oil drilling equipment orders, is an empty shell company with no sign of operations; (2) the Company's only chemical supplier is also an empty shell company, with little or no revenues; (3) the Company's largest subcontracting customer, which provides the vast majority of SinoTech's revenues, has unverifiable operations with minimal revenues; (4) the financial statements SinoTech issued in the United States are inconsistent with similar filings the Company made in China; (5) the Company has engaged in undisclosed related-party transactions in violation of Generally Accepted Accounting Principles; and (6) positive statements the Company made regarding its internal financial controls were false and misleading.
The day the Report was issued, the Company's stock price plummeted more than 40%, falling from $4.02 per share on August 15, 2011 to $2.35 per share at the close of trading on August 16, 2011 – a decline of $1.67 per share on unusually high trading volume. The NASDAQ halted SinoTech trading after the market closed on August 16, 2011, announcing that trading would remain halted until the Company "fully satisfied NASDAQ's request for additional information." To date, trading has not resumed.
The Pomerantz Firm, with offices in New York, Chicago, and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.