Stock fraud lawyers are investigating potential claims for investors against China Automotive Systems Inc. A class action lawsuit was filed against China Automotive on October 25, 2011, in the United States District Court for the Southern District of New York. The lawsuit, which was filed against the company as well as several of its officers, is applicable to purchasers of China Automotive securities from March 25, 2010, through March 17, 2011.
According to the complaint, China Automotive violated Sections 10(b) and 20(a) of the Securities Exchange Act. More specifically, according to the complaint, China Automotive:
- Did not properly account for convertible notes that were issued on February 15, 2008;
- Did not, as a result, accurately state its financial results during the Class Period;
- Did not prepare the Company’s financial results in accordance with GAAP, or Generally Accepted Accounting Principles;
- Did not maintain adequate financial and internal controls; and
- Issued misleading and materially false financial statements at all relevant times, as a result of the aforementioned misconduct.
China Automotive declared, on March 17, 2011, that because of errors in accounting related to its convertible notes, it would restate its financial statements for the 2009 fiscal year, as well as the majority of the 2010 fiscal year. China Automotive willingly stated that these financial statements could not be relied upon. As a result of this announcement, China Automotive’s shares fell 13.88 percent.
China Automotive is a holding company that engages in the manufacture and sale of automotive components and systems. Wholly-owned subsidiaries through which China Automotive conducts its business include Henglong USA Corporation and Great Genesis Holdings Limited.
If you purchased China Automotive securities from March 25, 2010, through March 17, 2011, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.