NEW YORK, Oct. 8, 2012 (GLOBE NEWSWIRE) -- Gainey & McKenna announces that a class action lawsuit has been filed in the United States District Court for the District of Delaware, on behalf of a class consisting of all purchasers of the common stock of China Agritech, Inc. ("China Agritech" or the "Company") (OTC:CAGC) between November 12, 2009 and March 11, 2011, inclusive (the "Class Period"). This class action is brought under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)-5 promulgated thereunder.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company's business operations, financial condition and prospects. For example, the Company overstated its revenues and omitted to disclose significant related-party transactions. However, the truth started to reveal itself regarding the accuracy of China Agritech's financial statements. On February 3, 2011, the research firm LM Research published a report asserting that China Agritech was engaged in fraud. The report concluded that the Company's financial statements were fraudulent, its purported revenue was overstated and that its plants were idle. As a result of the LM Research report, shares in China Agritech declined from a close of $10.78 on February 2, 2011 to $9.85 on February 3, 2011, on unusually high volume of over 2.6 million shares.
If you wish to serve as lead plaintiff, you must move the Court no later than December 7, 2012. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Thomas J. McKenna, Esq. of Gainey & McKenna at (212) 983-1300, or via e-mail at firstname.lastname@example.org. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
While Gainey & McKenna did not file the Complaint in this matter, the firm, with offices in New York and New Jersey, regularly prosecutes cases on behalf of shareholders in state and federal courts throughout the United States.
Source: Gainey & McKenna