Pomerantz Law Firm Reminds Shareholders of RINO International Corporation of Upcoming Deadline -- RINO
December 23 2010 - 12:42PM
Shareholders of RINO International Corporation ("RINO" or the
"Company") (formerly Nasdaq:RINO) (OTCBB:RINO) are reminded of the
securities class action lawsuit filed against RINO and certain of
its officers. The class action (Civil Action No.: 10-cv-1908)
pending in the Central District of California is on behalf of a
class of all persons or entities who purchased or otherwise
acquired RINO securities during the period from May 15, 2008
through November 17, 2010, inclusive (the "Class Period"). The
Complaint alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
RINO, through its subsidiaries, operates as an environmental
protection and remediation company in the People's Republic of
China. The Company engages in designing, manufacturing, installing,
and servicing wastewater treatment and flue gas desulphurization
equipment primarily for use in the iron and steel industry, and
anti‑oxidation products and equipment for use in the manufacture of
hot rolled steel plate products.
The Complaint alleges that throughout the Class Period,
defendants made false and/or misleading statements, as well as
failed to disclose material adverse facts about the Company's
business, operations, and prospects. Specifically, Defendants made
false and/or misleading statements and/or failed to disclose: (1)
that the Company did not enter into at least two customer contracts
and 20-40% of the Company's other contracts had problems for which
it reported revenues during its 2008 and 2009 fiscal years; (2)
that the Company's reported revenues for fiscal year 2009 to the
SEC were inflated by 94%; (3) that the Company's management was
draining cash from the Company for its own business and personal
uses; (4) that the Company lacked adequate internal and financial
controls; and (5) that, as a result of the foregoing, the Company's
financial results were materially false and misleading at all
relevant times.
On November 10, 2010, Muddy Waters LLC ("Muddy Waters"), a
research firm issued a report calling into question, among others,
the Company's customer relationships, accounting, and financial
results. The research firm claimed that its investigation indicated
that RINO had fabricated customer relationships, exaggerated sales,
and issued phony financial statements. In particular, the report
highlighted that the same day that RINO closed a $100 million
financing transaction, certain officers/directors "borrowed" $3.2
million from the Company to purchase a luxury home in Orange
County, California.
On this news, shares of RINO declined by $2.34 per share, more
than 15%, to close on November 10, 2010, at $13.18 per share, on
unusually high volume. The stock further declined another $2.08 per
share, or 15.08%, to close on November 11, 2010, at $11.10 per
share after launching an internal review into Muddy Waters'
allegations.
Then on November 15, 2010, RINO announced extremely
disappointing third quarter 2010 results with revenues of $52.7
million and net income of $8.8 million, just over half the net
income reported on the prior year. RINO also reduced its revenue
forecast for 2010 from $221-$229 million to $203-$211 million. On
this news, RINO's shares declined $3.46 per share, or more than
31%, to close on November 15, 2010, at $7.55 per share.
On November 19, 2010, RINO disclosed in a filing with the SEC
that it had received a letter from its independent auditing firm
which recounted a conversation between a member of the firm and
RINO's Chief Executive Officer, defendant Zou Dejun, during which
Dejun revealed that RINO had, in fact, not entered into two of the
six customer contracts discussed in the Muddy Waters report.
Furthermore, the independent auditors advised that its audit
reports of the Company's previously issued financial statements for
fiscal years 2008 and 2009 and its reviews of the Company's
quarterly financial statements for fiscal years 2008 and 2009 and
its reviews of the Company's quarterly financial statements for
periods between March 31, 2008 and September 30, 2010 should no
longer be relied upon.
When RINO's shares resumed trading on the OTC on December 8,
2010 after being halted by NASDAQ on November 17, 2010, the stock
further declined $2.92 or 48% and closed at $3.15 per share.
If you are a shareholder who purchased RINO securities during
the Class Period, you have until January 14, 2011 to ask the Court
to appoint you as lead plaintiff for the class. A copy of the
complaint can be obtained at www.pomerantzlaw.com. To discuss this
action, contact Rachelle R. Boyle at rrboyle@pomlaw.com or
888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by
e-mail are encouraged to include their mailing address and
telephone number.
The Pomerantz Firm, with offices in New York, Chicago and
Washington, D.C., is acknowledged as one of the premier firms in
the areas of corporate, securities, and antitrust class litigation.
Founded by the late Abraham L. Pomerantz, known as the dean of the
class action bar, the Pomerantz Firm pioneered the field of
securities class actions. Today, more than 70 years later, the
Pomerantz Firm continues in the tradition he established, fighting
for the rights of the victims of securities fraud, breaches of
fiduciary duty, and corporate misconduct. The Firm has recovered
numerous multimillion-dollar damages awards on behalf of class
members. See www.pomerantzlaw.com.
CONTACT: Pomerantz Haudek Grossman & Gross LLP
Rachelle R. Boyle
888-476-6529 (ext. 237)
rrboyle@pomlaw.com
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