NEW YORK, June 8, 2011 (GLOBE NEWSWIRE) -- Milberg LLP today announced that on June 7, 2011, the firm filed a class action lawsuit on behalf of sellers of Puda Coal, Inc. ("Puda" or the "Company") (NYSE Amex:PUDA) put options and investors who purchased the securities of Puda during the period November 13, 2009, to April 11, 2011, inclusive (the "Class Period"). Milberg had previously filed an action on behalf of share purchasers, but expanded the class definition after being retained by a put seller that, like common share purchasers, lost money from Puda's fraud.
The case, Thumith v. Puda Coal Inc., No. CV11-04835, is pending in the United States District Court for the Central District of California and alleges violations of the Securities Exchange Act of 1934 by Puda and certain of the Company's officers.
Puda is a supplier of premium high grade cleaned coking coal used to produce coke for steel manufacturing in the People's Republic of China (the "PRC" or "China"). The Company is incorporated in Delaware and headquartered in Taiyuan, Shanxi Province, China.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements to investors by failing to disclose that the Company's Chairman, Ming Zhao, had transferred ownership of Puda's operating entity, Shanxi Puda Coal Group Co., Ltd. ("Shanxi Coal"), to himself, thereby rendering Puda an empty shell company.
On April 8, 2011, Alfred Little, an investor who researches and blogs about Chinese companies, exposed the transfer of Shanxi Coal to Ming Zhao. In reaction to this news, shares of Puda's stock fell $3.10 per share, or over 34 percent, to close at $6.00 per share, on extremely heavy trading volume. On the next trading day, April 11, 2011, the Company issued a press release stating that, "[a]lthough the investigation is in its preliminary stages, evidence supports the allegation that there were transfers by Mr. Zhao in subsidiary ownership that were inconsistent with disclosure made by the Company in its public securities filings. Mr. Zhao has agreed to a voluntarily leave of absence as Chairman of the Board of the Company until the investigation is complete." In response to this announcement, the NYSE halted trading in the Company's stock on April 11, 2011.
If you purchased securities of Puda from November 13, 2009, to April 11, 2011, or sold puts during that time, and lost money, you may move the court no later than June 13, 2011, and request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the Court must decide that you have the largest financial interest of any competing movant and that your claims are typical of the claims of other class members, and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by the decision whether or not to serve as a lead plaintiff. If there is a recovery in this action and you are part of the class, you can recover as an absent class member without moving for lead plaintiff or otherwise taking an active role in the litigation. You may retain Milberg LLP, or other attorneys, to serve as your counsel in this action, but do not need to retain counsel to participate in any recovery as an absent class member.
Milberg LLP is widely recognized as the premier class action and complex litigation firm, representing individual and institutional investors, pension funds, hedge funds, unions, and consumers. Founded in 1965, Milberg has offices in New York, Los Angeles, Tampa, and Detroit. The Firm has taken the lead in landmark cases that have set groundbreaking legal precedents and prompted changes in corporate governance benefiting shareholders in North America and abroad. Please visit the Milberg website ( www.milberg.com ) for more information about the Firm.
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