San Diego, Dec. 9, 2011 (Shareholders Foundation) -- An investigation on behalf of investors in shares of China Medical Technologies, Inc. (ADR) (NASDAQ:CMED) over possible Violations of Federal Securities Laws was announced.

The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of China Medical Technologies, Inc. (ADR) (NASDAQ:CMED) concerning whether the company, certain of its officers and directors, or others have possibly violated federal securities laws. Specifically, the investigation concerns whether certain statements regarding China Medical Technologies business, its prospects and its operations were potentially materially false and misleading at the time they were made.

China Medical Technologies, Inc. reported that its 12months Revenue rose from $723.07million for a 12months period ending on March 31, 2010 to $842.37million for a 12months period ending on March 31, 2011 and its Net Loss of $69.58million for a 12months period ending on March 31, 2010 turned into a Net Income of $82.62million for a 12months period ending on March 31, 2011.

Shares of China Medical Technologies, Inc. (ADR) (Public, NASDAQ:CMED) traded in February 2011 as high as $13.44, but decreased over the next month to $3.32 in the end of November.

Then 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 firms sales since inception, to the chairman at less than 2x trailing EBITDA. Glaucus Research Group said that evidence supports the allegation that China Medical Technologiess 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 on December 8 at $3.08 per share.