Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether L&L Energy, Inc. (“L&L” 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 was filed in the U.S. District Court for the Southern District of New York by another law firm on behalf of purchasers of the common stock of L&L Energy, Inc. (NASDAQ: LLEN) between September 11, 2012 and September 18, 2013, inclusive (the “Class Period”).
The complaint alleges that L&L and certain of its officers and directors (“Defendants”) misrepresented and/or failed to disclose that: (1) the Company improperly recognized substantial revenue from operations that were already shut down; (2) the Company claimed acquisitions and divestitures of various properties through swap transactions that never occurred, or through the exchange of assets it did not own; (3) the Company lacked adequate internal and financial controls; and (4) that, as a result of the foregoing, the Company's financial results were materially false and misleading.
The claims in the proposed class action against the Company arise from allegations made in a September 18, 2013 report issued by GeoInvesting in which it accused the Company of “
defraud[ing] investors by booking substantial revenue from operations that have been idled for quite some time
.” That report further stated:
GeoInvesting also believes that LLEN’s string of acquisitions and divestitures of various properties over the last few years amounts to a bait and switch shell game where it claimed to come into possession of assets through swap transactions that never occurred through the exchange of assets it never owned in the first place.
Most notably, we will show that revenue of $77.6 million disclosed in LLEN’s 2013 10K, generated from its Hong Xing coal washing factory, was actually close to zero, if it is not actually zero.
The Company denied any wrongdoing; however, on September 20, the Company reported that a special committee was convened to investigate allegations against the Company.