The law firm of Berman DeValerio filed a securities fraud lawsuit today on behalf of investors who purchased or otherwise acquired the common stock of RINO International Corporation (“RINO” or the “Company”) (formerly NASDAQ:RINO, currently OTCBB:RINO) from July 13, 2009 to November 12, 2010, inclusive (“Class Period”). Berman DeValerio ( www.bermandevalerio.com) filed the class action complaint against RINO and certain of the Company’s directors and officers in the United States District Court for the Central District of California (the “Court”). The case is captioned as Zhang v. RINO International Corp. et al., No. SACV-10-01887-CJC (RNBx).
If you wish to serve as lead plaintiff, you must file a motion with the Court no later than January 14, 2011.
The complaint alleges RINO and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Securities and Exchange Commission (“SEC”) Rule 10b-5. Specifically, the complaint asserts that RINO, a Chinese manufacturer of environmental protection equipment for China’s iron and steel industry, fraudulently reported inflated revenues to the SEC and the investing public that were, for 2009, over 90 percent higher than the revenues reported to Chinese regulators. In particular, the complaint alleges that RINO misled investors by reporting revenue from at least two customer contracts that did not exist.
On November 10, 2010, the research firm Muddy Waters LLC issued a report that called into question the Company’s customer relationships, accounting and financial results. The report also highlighted that on the same day that RINO closed a $100 million financing transaction, certain officers and directors borrowed $3.2 million from the Company to purchase a luxury home in Orange County, California. Upon release of this report, RINO’s stock price quickly fell, declining over 15% to $13.18 on November 10.Over the next several days, RINO reported very disappointing third-quarter earnings, cancelled a planned earnings call with investors and failed to respond to the allegations in the Muddy Waters report. On November 17, 2010, the NASDAQ halted trading in RINO, by which time the stock price had fallen to $6.07, a decrease of 61% over less than six trading days.