Following a recent sharp stock price decline an investigation on behalf of investors in JBI, Inc. (PINK: JBII) shares over potential Federal Securities Laws violations was announced.

The investigation by a law firm focuses on possible shareholder claims based on potential violations of the federal securities laws. Specifically the investigation concerns whether JBI Inc. or others may have violated securities laws by issuing a series of statements regarding its business, its prospects and its operations that were materially false and misleading at the time they were made.
Specifically, the investigation focuses on JBI Incs restatement of its financial statements for the third quarter of 2009 and for the year ended December 31, 2009 that concerned its valuation of media credits, accounting for certain acquisitions, and equity issuances.
JBI, Inc. reported an increase in its annual Total Revenue from $3.91million in 2009 to $12.42million in 2010. However its Net Income, respectively its Net Loss grew from a Net Loss of $1.84million in 09 to a Net Loss of $14.34million in 2010. Even though JBI, Inc. reported a lower first quarter Net Loss for the first quarter in 2011 of $2.76million compared to a first quarter Net Loss of $3.18million a year earlier, its first quarter Revenue decreased from $3.57million last year to $2.20million for the first quarter this year.

Shares of JBI, Inc. (Public, PINK:JBII) rose on June 15, 2011 to as high as $4.15 per share, but fell on July 15, 2011 to as low as $1.75 per share after JBI, Inc. disclosed that on July 14, 2011, the staff of the U.S. Securities and Exchange Commissions (SEC) Division of Enforcement issued a Wells Notice to JBI, Inc., indicating that the staff intended to recommend that the SEC file a civil lawsuit alleging that JBI, Inc. violated certain provisions of the federal securities laws .

JBI, Inc. also disclosed that based on communications with the Enforcement staff, it believes that the proposed lawsuit relates to JBI, Incs subsequently restated financial statements for the third quarter of 2009, which were included in its Form 10-Q filed on November 16, 2009 and its financial statements for the year ended December 31, 2009, which were included in its 2009 Form 10-K filed on March 31, 2010.