Bernstein Liebhard LLP today announced that a lawsuit has been filed in the United States District Court for the District of Nevada on behalf of a class (the “Class”) of investors who purchased A-Power Energy Generation Systems, Ltd. (“A-Power” or the “Company”) (NASDAQ: APWR) common stock between the period of August 27, 2009 to June 27, 2011 (the “Class Period”).
The complaint charges A-Power and certain of its officers and directors with violations of the Securities Exchange Act of 1934. A-Power is engaged in providing onsite distributed power generation systems and micro power grids for industrial companies.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. As a result of defendants’ false statements, A-Power’s stock traded at artificially inflated prices during the Class Period, reaching a high of $20.55 per share on December 22, 2009.
On June 17, 2011, Seeking Alpha published an article stating, among other things, that A-Power had a history of internal weaknesses over financial controls, which had resulted in an adverse opinion from A-Power’s independent auditor, and that the Company’s filings with the State Administration for Industry and Commerce showed that A-Power was reporting significantly lower revenue and profit to the authorities in China than it was reporting in its filings with the SEC.
Then, on June 27, 2011, A-Power issued a press release announcing that MSCM LLP, the Company’s auditor, had resigned, and stating that MSCM’s resignation was due to the Company’s non-retention of a qualified independent forensic accounting firm to evaluate “certain business transactions that MSCM stated was necessary for MSCM to complete its audit of the Company’s financial statements for the year ended December 31, 2010 on a timely basis.” The Company also acknowledged that it would be delayed in filing its Form 20-F for the fiscal year ending December 31, 2010, due in part to MSCM’s resignation. On this news, after the market closed, NASDAQ halted trading of A-Power stock at $1.67 per share.