SkyPeople Fruit Juice, Inc. Hit By Investor Lawsuit Over Alleged Violations Of Securities Laws
An investor in SkyPeople Fruit Juice, Inc. (NASDAQ:SPU) filed a lawsuit in the United States District Court for the Southern District of New York against SkyPeople Fruit Juice, Inc over alleged violations of Federal Securities Laws.
According to the complaint the plaintiff alleges that SkyPeople Fruit Juice, Inc engaged in undisclosed related party transactions in violation of the federal securities laws.
SkyPeople Fruit Juice reported an increase in 12months Total Revenue from $41.65million in 2008 to $93.25million in 2010. It reported an increased in its Net Income from $10.01million in 2008 to $21.18million in 2010.
However, shares of SkyPeople Fruit Juice, Inc fell from as high as $6.52 per share in August 2010 to $4.03 on April 20, 2011.
On March 31, 2010, the Company issued its Annual Report on Form 10-K for the year ending December 31, 2009. The Company stated that there were no related party transactions that year. On April 1, 2011, the Company issued its Annual Report on Form 10-K for the year ending December 31, 2010. It stated that one of the Company’s major acquisitions in 2009, Yingkou Trusty Fruits Co., Ltd., had been 46% owned by a company which in turn was 80% owned by SkyPeople’s CEO and 20% owned by a director of SkyPeople.
On April 1, 2011, Roth Capital Partners cut their price target for SkyPeople from $13 to $4.50, citing concerns about related party transactions. From March 31, 2011 to April 4, 2011 (two trading days), SkyPeople stock price fell from $4.41 per share to $3.57 per share, damaging investors.