Investor Lawyers Blog
Investment attorneys are seeking investors who purchased China Medical Technologies Inc. securities in connection with recent fraud allegations made against the company. Officers and directors of China Medical may have violated federal securities laws and, as a result, investors in the company may have a valid securities arbitration claim. China Medical, a Chinese company listed in North America, handles the developing, manufacturing and marketing for medical devices, including molecular and immunodiagnostic products.
China Medical shares saw a 23 percent plunge on December 6, 2011. The significant plunge in value marks an all-time low for the firm’s shares. The plunge followed Glaucus Research Group’s allegations that Xiaodong Wu, China Medical’s CEO, “orchestrated an acquisition to embezzle roughly $20-$23 million from the public company.” According to the research firm, China Medical acquired an entity at a price far over its value that the firm believes is secretly related to China Medical’s CEO.
Furthermore, Glaucus alleges that the firm’s primary business segment was sold to the chairman by China Medical. This primary business segment — which develops products that are used in the treatment of benign tumors and solid cancers — was the firm’s biggest revenue generator from the time of the firm’s inception. The reason for this transaction stems from the impending suspension of China Medical’s permit to sell HIFU products by the Chinese FDA. China Medical’s core business segment would have been rendered worthless if the company’s permit was suspended.
China Medical denies all allegations that it defrauded investors. However, if it is proven that China Medical did, in fact, violate federal securities laws, investors who incurred losses may be entitled to compensation.
Individuals who purchased China Medical Technologies Inc. securities should contact an investment attorney immediately. To find out more about your legal rights and options, contact The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.