Rigrodsky & Long, P.A. announces that it has commenced an investigation into Wonder Auto Technology, Inc. (“Wonder Auto” or the “Company”) (Nasdaq: WATG) and certain of its officers and directors for possibly violating the federal securities laws.
On February 23, 2011, in connection with the preparation of its consolidated financial statements for the fiscal year ended December 31, 2010, Wonder Auto concluded, that its financial statements as of and for the years ended December 31, 2008 and 2009, as well as the financial statements included in its Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30 during each of the years 2008 and 2009 should no longer be relied upon due to a cutoff error regarding timing of revenue in such periods. As a result, on March 17, 2011, the Company notified the SEC that it was unable to complete its Form 10-K within the prescribed time period.
Thereafter, on May 12, 2011, Wonder Auto issued a press release wherein it stated that the Company’s Audit Committee, with the assistance of professional advisors, has undertaken an internal investigation concerning certain investment and acquisition transactions. The Audit Committee commenced the investigation in response to a report alleging that the Company had engaged in several transactions without properly disclosing their related-party nature. According to a May 20, 2011 statement by Wonder Auto, based on the information presently available to it, the Audit Committee expects that its investigation will continue at least through June 2011.
Moreover, as a result of the pending restatement of its financial statements for fiscal years 2008, 2009 and 2010, and for the quarters ended March 31, June 30 and September 30, 2009 and 2010, and the investigation, Wonder Auto has not filed its Form 10-K for the fiscal year ended December 31, 2010 and does not expect to be able to file its Form 10-Q for the quarter ended March 31, 2011 by the filing deadline of May 10, 2011. The Company also reiterated that it has received a notice from The Nasdaq Stock Market (“Nasdaq”) as to its noncompliance with Nasdaq’s continued listing standards as a result of the failure to file its 10-K in a timely manner. Nasdaq further has informed Wonder Auto that it has suspended trading in the Company’s common stock pending Wonder Auto's provision of a satisfactory Plan of Compliance to Nasdaq. The Company does not expect that its filings will be completed until the completion of the investigation.