NEW YORK, March 24, 2010 (GLOBE NEWSWIRE) -- Pomerantz Haudek Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action lawsuit in the United States District Court, Southern District of New York, against Fuqi International, Inc. ("Fuqi" or the "Company"), (Nasdaq:FUQI) and certain of its top officials. The class action (10-CV-2639) was filed on behalf of purchasers of the securities of the Company between May 15, 2009 and March 16, 2010, both dates inclusive, (the "Class Period"). The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder.
Fuqi is a leading designer of high quality precious metal jewelry in China, developing, promoting and selling a broad range of products in the large and rapidly expanding Chinese luxury goods market. The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning Fuqi's business, operations and prospects were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company's financial results were artificially inflated due to Fuqi's material misstatements involving the accounting of the Company's inventory and cost of sales where it understated the cost of sales and overstated gross profit and net income; (2) that the Company's internal and disclosure controls with respect to its inventory and cost of sales were materially deficient; (3) as a result of the foregoing, Fuqi's financial statements were not fairly presented in conformity with United States Generally Accepted Accounting Principles ("GAAP") and were materially false and misleading; and (4) based on the foregoing, Defendants lacked a basis for their positive statements about the Company, its prospects and growth.
On March 16, 2010, after the market closed, the Company disclosed that Fuqi had identified certain errors related to the accounting of the Company's inventory and cost of sales, and that the result of the accounting errors was expected to have a material impact on the Company's previously issued quarterly financial statements for the first three quarters of 2009. The Company informed investors that, as a result, Fuqi's financial statements for the first three quarters of 2009 should no longer be relied upon and that the Company intended to file amendments disclosing the effect of the accounting errors.
The next day, as a result of this news, the price of Fuqi stock declined $7.10 per share, or approximately 37%, to close on March 17, 2010, at $11.90 per share, on unusually heavy volume.
If you are a shareholder who purchased the securities of Fuqi during the Class Period, you have until May 18, 2010 to ask the Court to appoint you as lead plaintiff for the class. Shareholders outside the United States may join the action, regardless of where they live or which exchange was used to purchase the securities. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Nicola Brown at Nbrown@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.