Orient Paper Inc. long Term Investor Investigation

An investor in ONP stock filed a lawsuit on behalf of investors who purchased common stock of Orient Paper, Inc. during the period between March 27, 2009 and July 22, 2010. Meanwhile an investigation on behalf of current long term investors of Orient Paper, Inc. (AMEX: ONP), including those who purchased their ONP stocks prior to March 2009 and continue to hold those shares, was announced.

Orient Paper, Inc. is the holding company for Hebei Baoding Orient Paper Milling Company Limited (HBOP), a producer and distributor of paper products in China.

According to the complaint filed in the U.S. District Court for the Central District of California the plaintiff alleges on behalf of investors who purchased common stock of Orient Paper, Inc. during the period between March 27, 2009 and July 22, 2010, that Orient Paper and certain of its officers and directors violated Federal Securities Laws by misrepresenting Orient Paper’s financial performance, business prospects, and financial condition. The Complaint also names Roth Capital Partners LLP as a defendant because it underwrote a public offering for Orient Paper on March 31, 2010. The Complaint asserts that Orient Paper’s revenues were substantially overstated and that it exaggerated the extent of its business operations. On June 28, 2010, an entity calling itself Muddy Waters released a report containing facts indicating that Orient Paper has issued false financial statements and press releases. The report was followed by a series of back-and-forth accusations between Muddy Waters and Orient Paper. Then on July 16, 2010, Orient Paper announced that it decided to retain a law firm and a “Big Four” audit firm to conduct an investigation into the issues raised by Muddy Waters LLC. As a result of these disclosures, so the lawsuit, Orient Paper’s share price dropped substantially, damaging shareholders. Shares of Orient Paper Inc (NYSE:ONP) recently traded at $5.25 per share, down from its 52weekHigh of $15.15 per share.