Hagens Berman announced that it is investigating potential claims against the investment bankers and auditors of Puda Coal, Inc. ("Puda" or the "Company") (AMEX:PUDA), including Macquare Capital, Brean Murray, Carret & Co., Newbridge Securities Corp. and Moore Stephens after two offerings of shares in the company. The first offering occurred on December 8, 2010 and the second occurred on February 12, 2010. Moore Stephens was the auditor for the December 31, 2009, 2008 and 2007 financial statements.
A class-action lawsuit has been filed in the United States District Court for the Southern District of New York. The lawsuit alleges that Puda and its investment bankers and auditors failed to disclose adverse facts about the company's business.
Hagens Berman is interested in talking to investors who purchased shares of Puda Coal on or around December 8, 2010 and February 12, 2011 or directly from the investment banks. The deadline to move to be lead plaintiff is June 13, 2011.
Investors can contact the Hagens Berman legal team via email at Pudacoal@hbsslaw.com. Partner Reed R. Kathrein is leading the firm's investigation, which focuses on the company's investment banks and underwriters, from its San Francisco office and can be reached by phone at 510-725-3000. Additional information is available at www.hbsslaw.com/pudacoal.The suit alleges that Puda transferred the ownership of subsidiary Shanxi Coal without authorization or disclosure to investors and exaggerated its ownership stake in the subsidiary. "Puda's auditors and investment bankers appear to have failed to perform basic due diligence and inform investors of crucial facts about this subsidiary and the company's stake in it," said Mr. Kathrein. "If that is the case, they should be held to account." On April 8, 2011, an article entitled "Puda Coal Chairman Secretly Sold Half the Company and Pledged the Other Half to Chinese PE Investors" was published. Following a response from Puda announcing that it was reviewing the allegations in the article, the stock price for the company fell 34 percent.