China-Biotics Inc (OTC: CHBT) Investor Securities Class Action Lawsuit 05/25/2012

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Company Name(s): 
China-Biotics
Case Name: 
China-Biotics Shareholder Class Action Lawsuit 05/25/2012
Case Status: 
Lawsuit Filed
Affected Securities
OTC: CHBT
NASDAQ: CHBT
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
05/25/2012
Class Period Begin: 
02/09/2011
Class Period End: 
07/01/2011
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
07/24/2012
Summary: 

October 18, 2012 -This case was consolidated into case 10-CV-07838 filed October 13, 2010.

September 6, 2012 - Lead plaintiff and lead counsel were appointed.

July 24, 2012 - Lead plaintiff motions were filed.

May 25, 2012 - An investor in shares of China-Biotics Inc (OTC: CHBT) filed a lawsuit in the U.S. District Court for the Southern District of New York against China-Biotics Inc over alleged violations of Federal Securities Laws in connection with certain financial statements made between February 9, 2011 and July 1, 2011.

According to the complaint the plaintiff alleges that between February 9, 2011 and July 1, 2011, Defendants allegedly knew, or recklessly disregarded, that China-Biotics Inc fabricated a false sales contract, a false bank website; and a false bank advice in furtherance of its scheme to fraudulently create the appearance of having achieved a 50% growth in 2011 revenue.

China-Biotics Inc reported that its Total Revenue rose from $30.6 1 million for the 12 months period ending on March 31, 2007 to $81.36 million for the 12 months period ending on March 31, 2010.

However, its Net Income fell from $19.87 million for the 12 months period ending on March 31, 2009 to $15.65 million for the 12 months period ending on March 31, 2010.

The plaintiff says that as a result of the dissemination of the materially allegedly false and misleading information and failure to disclose material facts, the market price of China-Biotics Inc (OTC: CHBT) common stock was artificially inflated between February 9, 2011 and July 1, 2011.

Shares of China-Biotics Inc (OTC: CHBT) traded in August 2011 at $3.51 but lost significantly value and traded in September 2011 as low as $0.48 per share.

Recently China-Biotics Inc (OTC: CHBT) closed at $0.75 per share.