Cohen Milstein Sellers & Toll PLLC Announces Investigation Of Jiangbo Pharmaceuticals, Inc.

Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Jiangbo Pharmaceuticals, Inc. (“Jiangbo” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

A class action lawsuit has been filed in the U.S. District Court for the Southern District of Florida by another law firm on behalf of purchasers of the common stock of Jiangbo Pharmaceuticals, Inc. (JGBO) between May 17, 2010 and May 31, 2011, inclusive (the “Class Period”).

Jiangbo purports to be engaged in the research, development, production, marketing and sales of pharmaceutical products in China.

The complaint alleges that Jiangbo and certain of its officers and/or directors (“Defendants”) made materially false and misleading statements and failed to disclose material facts concerning the Company’s operations, financial condition and certain financial transactions.

After the market close on March 18, 2011, Jiangbo reported that its Chief Financial Officer had resigned her position “due to family reasons.” Although the Company reported that “[t]here were no disagreements between Ms. Sung and the Company on any matter relating to the Company’s operations, policies or practices, which resulted in her resignation,” the price of Jiangbo shares fell from $5.88 to $5.41 on the next trading day. On the evening of May 24, 2011, Jiangbo released its results for its third fiscal quarter ended March 31, reporting that revenues and net income had fallen. The price of Jiangbo shares fell throughout this period and last traded at $3.08 on May 31, 2011, when trading was halted pending receipt of additional information requested by NASDAQ from the Company.

On June 7, 2011 the Company filed an 8-K reporting that two independent directors, who were also members of the Audit Committee, had announced their immediate resignation from the Company. In a letter to the Company’s board, they stated that the “Company has created circumstances that force us to resign,” and revealed that, in response to an undisclosed SEC subpoena received by Jiangbo on March 26, 2011, the Audit Committee had retained outside firms to conduct an independent investigation into the matters raised by the SEC and to provide forensic accounting services in connection with that investigation. The letter further stated that “the conduct and statements by the Company and those controlling and advising it have demonstrated a clear and continuing lack of cooperation,” as a result of which the internal investigation was halted. Moreover, their letter states, “the manner and timing of the Company’s payments to the Audit Committee’s advisers (Cadwalader and E&Y) raise additional serious concerns regarding the veracity or correctness of banking information provided by the Company.”