After trading of KEYP shares was halted an investigation on behalf of investors of Keyuan Petrochemicals, Inc. (NASDAQ:KEYP) over possible violations of Federal Securities Laws was announced.

The investigation by a law firm focuses on potential securities claims against Keyuan Petrochemicals, Inc. (NASDAQ: KEYP) resulting from allegations that Keyuan Petrochemicals may have issued materially false financial statements and information to investors.

Keyuan Petrochemicals, Inc. reported for the first three quarters in 2010 a combined nine months Total Revenue of $400.71million with a combined nine months Net Income of $18.54million.

Prior to market open on April 1, 2011 trading in Keyuan Petrochemicals stock halted. Thereafter, Keyuan Petrochemicals issued a press release announcing that it would not be able to timely release its financial results for the fiscal year ended December 31, 2010. The announcement also revealed that the accounting review conducted to date had identified various concerns that prompted the Companys audit committee to undertake an independent investigation.
Later the same day, Keyuan Petrochemicals filed an 8-K with the U.S. Securities and Exchange Commission (SEC) under item 4.02 entitled Non-Reliance on Previously Issued Financial Statements. According to the 8-K, Keyuan Petrochemicals auditors informed Keyuan Petrochemicals that there is a possibility that we may be required to make certain adjustments to certain of our previously issued financial statements, and that such previously issued financial statements may not be relied upon.