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If you purchased shares of China Agritech Inc. (NASDAQ:CAGC), and/or if you have any information relating the investigation including former employees or/and whistleblowers, you have certain options and you should contact the Shareholders Foundation, Inc.
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To have your information reviewed for options and to receive notifications about this investigation, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Investigation Overview
An investigation for investors in shares of China Agritech Inc. (NASDAQ:CAGC) concerning possible violations of Federal Securities Laws by China Agritech Inc was announced.
The investigation by a law firm focuses on whether China Agritech Inc. violated Federal Securities Law by issuing materially inaccurate financial statements to the investing public between February 8, 2010 and February 3, 2011.
While China Agritech reported an increase in its 12months Total Revenue from $29.53million in 2006 to $76.13million in 2009, its Net Income insignificantly rose from $5.35million in 2006 to $5.69million in 2009. For the first three quarters in 2010 China Agritech Inc. reported a combined nine months Total Revenue of $78.07, thus exceeding with a nine months Total Revenue its 2009 12months Total Revenue. Its combined nine months Net Income rose to $13.62million, thus again exceeding its 12months result from 2009 with a nine months result in 2010.
Shares of China Agritech Inc. (NASDAQ: CAGC) increased from $6.71 per share in October 2009 to $18.43 per share in January 2010. China Agritech Inc shares split 2:1 on February 8, 2010 and then increased to $30 in March 2010. CAGC shares fell to under $10 on February 3, 2011 after analyst firm LM Research issued a report alleging, among other things, that the China Agritechs statement of revenue and earnings for the fiscal year 2009 are materially false and misleading and that the China Agritech does not have a currently functioning business generating anything close to $100 million in revenue and that they are very confident that the company is a scam. The Report, citing sources, claims that China Agritechs U.S. financial statements were materially different than the financial statements filed with Chinese authorities by a number of China Agritechs subsidiaries. The report claims that the revenue reported in the China Agritechs SEC filings for 2009 is ten times larger than what the Chinese regulatory reports show. The LM Research report also noted a number of potential red flags of fraud within China Agritech Inc.
On Feb 4, 2011 China Agritech, Inc. (Nasdaq: CAGC) issued a press release denying the allegations, but CGAC shares traded during Friday as low as $9.45 per share.
