After Harbin Electric shares lost 65% of its value an investigation on behalf of investors of Harbin Electric, Inc. (NASDAQ: HRBN) over potential violations of Federal Securities Laws was announced.

The investigation by a law firm focuses on whether Harbin Electric has violated federal securities laws in connection with statements made to the Company's shareholders.
Harbin Electric, Inc. (Public, NASDAQ:HRBN) annual Revenue rose from $65.40million in 2007 to $426.48million in 2010. Its Net Income increased over the same time frame from $16.90million in 07 to $76.82million in 2010. However, even though Harbin Electrics first quarter Revenue fell just slightly from $105.49million for the first quarter in 2010 to $103.83million in the first quarter in 2011, its quarterly Net Income fell from $20.55million for the first quarter in 2010 to $10.81million in the first quarter in 2011.
On October 11, 2011 Harbin Electric, Inc. announced that its Board of Directors has received a proposal letter from its Chairman and Chief Executive Officer, Mr. Tianfu Yang and Baring Private Equity Asia Group Limited for Mr. Yang and an investment fund advised by Baring to acquire all of the outstanding shares of Common Stock of Harbin not currently owned by Mr. Yang and his affiliates in a going private transaction for $24.00 per share in cash, subject to certain conditions. Harbin Electric, Inc said Mr. Yang owns 31.1% of Harbin's Common Stock.

Shares of Harbin Electric, Inc. (NASDAQ: HRBN) surged from as low as $4.99 per share in March 09 to $23.20 on October 15, 2010

Then on June 10, 2010 Harbin Electric announced that its Board of Directors has received a letter from its Chairman and Chief Executive Officer, Mr. Tianfu Yang, and Abax Global Capital reaffirming their proposal to acquire all of the outstanding shares of Common Stock of Harbin Electric not currently owned by Mr. Yang, Abax and their respective affiliates in a going private transaction for $24.00 per share in cash.

However, HRBN stocks fell from over $20 during April 2011 to under $7 per share when on June 16, 2011, Citron Research alleged Harbin Electric was committing.. In a note by Citron Research said it has 'hundreds of pages of SAIC documents -- the in-country filings of Harbin's subsidiaries over the years. These documents do not even remotely resemble the company that Harbin portrays to US investors in its SEC filings.'

The very next day Harbin Electric responded to the allegations made by Citron Research and said that it is yet another attempt to drive its stock price down that is based on factually incorrect as well as out-of- context information.

Harbin Electric shares closed on Friday at $8.39 per share.