Gulf Resources, Inc. Investor Files Lawsuit Over Alleges Securities Laws Violations
A settlement in the amount of $2.125 million was proposed.
An investor in Gulf Resources, Inc. (NASDAQ:GFRE) filed a lawsuit in the U.S. District Court for the Central District of California against Gulf Resources, Inc over alleged violations of Federal Securities Laws.
According to the complaint the plaintiff alleges on behalf of investors who purchased common stock of Gulf Resources, Inc. (NASDAQ: GFRE) from March 16, 2009 to April 26, 2011, that Gulf Resources, Inc violated the Securities Exchange Act of 1934.
Gulf Resources, Inc. reported an increase in its 12months Total Revenue from $54.25million in 2007 to $158.34million in 2010. Its Net Income rose from $12.23million in 2007 to $51.28million in 2010. On the other hand shares of Gulf Resources, Inc. (Public, NASDAQ:GFRE) fell from as high as $14.49 in 2010 to recently $3.13 per share.
According to the complaint, Gulf Resources, Inc engaged in undisclosed related party transactions, and Chinese regulatory filings showed that Gulf Resources, Inc was materially smaller than it claimed to be. The complaint states that a report pointed to certain evidence indicating that Gulf Resources, Inc does not hold title to its Chinese operating subsidiaries, shareholders’ sole asset.
However, Gulf Resources Inc announced on April 28, 2011 that it provided additional disclosure disputing certain allegations related to the reliability of its filings with the SEC raised against it in the report.
GFRE shares fell from roughly $4 to $2.43 on April 26 but closed on Friday April 29, at $3.13 per share.