China Medical Technologies, Inc. (ADR) Investor Files Class Action Lawsuit Over Alleged Violations Of Securities Laws

If you purchased shares of China Medical Technologies, Inc. (ADR) (NASDAQ: CMED) between November 26, 2007 and December 12, 2011, you have certain options and there are strict and short deadlines running. Deadline: February 17, 2012. NASDAQ: CMED stockholders should contact the Shareholders Foundation, Inc.

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Company Name(s): 
China Medical Technologies
Case Name: 
China Medical Technologies Shareholders Class Action 12/19/2011
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: CMED
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
12/19/2011
Class Period Begin: 
11/26/2007
Class Period End: 
12/12/2011
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
02/17/2012
Summary: 

San Diego, Dec. 19, 2011 (Shareholders Foundation) -- An investor in shares of China Medical Technologies, Inc. (ADR) (NASDAQ:CMED) filed a lawsuit in the U.S. District Court, Southern District of New York against China Medical Technologies, Inc over alleged Violations of Federal Securities Laws.

According to the complaint the plaintiff alleges on behalf of all persons who purchased American Depository Shares ("ADS") of China Medical Technologies, Inc. between November 26, 2007 and December 12, 2011, that China Medical Technologies, Inc and certain of its directors violated the Securities Exchange Act of 1934 and Rule 10b-5

On December 6, 2011, Glaucus Research Group issued a report about China Medical Technologies alleging that it has defrauded investors. Glaucus Research Group claims in their report, among other things, that China Medical Technologies paid $28 million for an acquisition from a seller who Glauvus Research Group believes was secretly related to China Medical Technologies’ chairman and that China Medical Technologies sold its primary business segment, responsible for the majority of the firm’s sales since inception, to the chairman at less than 2x trailing EBITDA. Glaucus Research Group said that evidence supports the allegation that China Medical Technologies’s used a complex web of international shell companies and closely related lackeys to embezzle between $20 and $23 million from China Medical Technologies’ investors.

Following the report shares of China Medical Technologies, Inc. (ADR) (Public, NASDAQ:CMED) dropped from $3.38 on Monday to $2.55 on Tuesday, December 6.

The next day December 7, China Medical Technologies, Inc. (Nasdaq: CMED) responded to the allegations raised in a research report by Glaucus Research Group. China Medical Technologies said that the allegations set forth in the Glaucus Research report concern matters which have long been disclosed in China Medical Technologies’ annual reports and press releases, misrepresent the information they present and attribute motives to management that are based on innuendo and fail to take into account business and commercial considerations relevant to the matters discussed in the Report. China Medical Technologies said it denies the allegations entirely.

NASDAQ: CMED shares closed on December 7 at $3.25 per share and fell during December 16, 2011 to as low as $2.36 per share.