Izard Nobel LLP announced that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of the American Depository Shares (ADSs) of SinoTech Energy Limited from November 3, 2010 through August 16, 2011 (Class Period"), including purchasers of ADSs in the November 3, 2010 initial public offering. The Complaint charges SinoTech and certain of its officers and directors violated the federal securities laws. Among other things, defendants failed to disclose the following: (i) SinoTech's sole import agent, which accounted for more than $100 million worth of oil drilling equipment orders, is an empty shell company with no sign of operations; (ii) the Company's only chemical supplier is also an empty shell company, with little or no revenues; (iii) the Company's largest subcontracting customer, which provides the vast majority of SinoTech's revenues, has unverifiable operations with minimal revenues; (iv) the financial statements SinoTech issued in the U.S. are inconsistent with similar filings made in China; (v) SinoTech has engaged in undisclosed related-party transactions; and (vi) positive statements SinoTech made regarding its internal financial controls were false and misleading.
 

Source:reuters