Abraham, Fruchter & Twersky, LLP announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of a class (the “Class”) of investors who purchased China Valves Technology, Inc. (“China Valves” or the “Company”) (NASDAQ:CVVT) common stock between the period of January 12, 2010 through January 13, 2011.
The Complaint alleges China Valves and certain of its officers and directors with violating the federal securities laws by making false and misleading statements related to their acquisition of Changsha Valve Company, and Shanghai Pudong Hanwei Valve Co., Ltd. Specifically, the Complaint alleges that defendants failed to disclose that both acquisitions involved payments to entities or persons that were related to management at China Valves, in violation of GAAP and U.S. Securities and Exchange Commission regulations. The Company also overstated the business prospects and financial conditions of those same acquisitions.
On January 13, 2011, Citron Research published an online report that China Valves may be delisted from NASDAQ as it faces increased regulatory scrutiny over certain buyouts. Specifically, Citron Research stated that the financial results of Changsha Valve, an acquisition China Valves had made in 2010, have been overstated and that the acquisition was an improper related party transaction.
In a reaction to this news, shares of CVVT common stock fell $1.57 per share to close on January 13, 2011 at $7.15 per share, representing a drop of 18%.
If you purchased CVVT common stock between January 12, 2010 through January 13, 2011 and you wish to serve as lead plaintiff in this action, you must move the Court no later than April 5, 2011. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.