NEW YORK, June 2, 2011 (GLOBE NEWSWIRE) -- Pomerantz Haudek Grossman & Gross LLP has filed a class action lawsuit against Fushi Copperweld, Inc. ("Fushi" or the "Company") (Nasdaq:FSIN) and certain of its officers. The class action (cv-11-3772), pending in the Southern District of New York, is on behalf of a class of all persons who purchased Fushi securities during the period between August 14, 2007 and March 29, 2011, 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.
If you are a shareholder who purchased Fushi securities during the Class Period and would like to serve as Lead Plaintiff for the class, you have until July 5, 2011 to seek appointment from the Court. A copy of the complaint can be obtained at . To discuss this action, email Rachelle R. Boyle at rrboyle@pomlaw.com or call 888.476.6529, toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Complaint alleges, among other things, that Defendants made false and/or misleading statements and/or failed to disclose that: (1) that the Company was improperly applying hedge accounting to a cross currency interest swap derivative entered into in April 2007; (2) that the Company failed to recognize changes in the fair value of the April 2007 SWAP in its earnings during the Class Period, thus inflating its reported net income by material amounts; (3) that the Company incorrectly recorded $3.3 million and $1.8 million of gain on bargain purchases resulting from two acquisitions in February and May 2010; (4) as a result of incorrectly recording such gains, the Company overstated its net income for the quarters ended March 31, 2010 and June 30, 2010; (5) that the Company had material deficiencies in its internal controls over its financial reporting; (6) that Fushi's financial statements were not fairly presented in conformity with generally accepted accounting principles ("GAAP") and were materially false and misleading; and (7) based on the foregoing, defendants lacked a basis for their positive statements about the Company, its prospects and growth.
On March 11, 2011, after the market closed, Fushi disclosed that it is reevaluating the application of GAAP to certain accounting treatments applied to its 2007, 2008, and 2009 financial results as well as its previously filed quarterly financial statements for the first three quarters of 2010. Further, the Company disclosed that the "accounting treatments are related to the ability to realize deferred income tax assets, qualification of cash flow hedge for cross-currency interest swap, and bargain purchase gains recognized in 2010 acquisitions."
As a result of the disclosures, Fushi shares declined by $1.68 per share or 18% for three consecutive trading sessions, to close at $7.74 per share on March 16, 2011. On March 29, 2011, after the market closed, in a Form 8-K, Fushi disclosed that its Audit Committee concluded that the Company's previously issued financial statements for the years ended December 31, 2009, 2008 and 2007, and its unaudited interim financial statements for the quarters ended March 31, 2010, JuJune 30, 2010 and September 30, 2010 should no longer be relied upon and should be restated, due to two errors in the application GAAP regarding (1) the accounting for cross¬currency interest swap derivative and (2) the acquisitions of Dalian Jinchuan Electric Cable Co., Ltd. and Shanghai Hongtai Industrial Co., Ltd. As a result of these further disclosures, Fushi common stock declined by $0.19 per share or 2.3%, to close at $8.12 per share on March 30, 2011.
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 .
CONTACT: Rachelle R. Boyle Pomerantz Haudek Grossman & Gross LLP 888-476-6529 (ext. 237) rrboyle@pomlaw.com