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ShengdaTech, Inc. Long Term Investor Files Lawsuit Against Certain Officers And Directors

  • If you are a current long term investor in shares of ShengdaTech, Inc. (NASDAQ:SDTH) including those who purchased SDTH shares (also) prior to March 15, 2010 and continue to hold those NASDAQ: SDTH shares, you have certain options and you should contact the Shareholders Foundation, Inc.

  • To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.

Lawsuit Overview

Company
ShengdaTech, Inc.
Security
NASDAQ: SDTH

Case Name
ShengdaTech Shareholder Derivative Action 04/12/2011
Type of Lawsuit
Stockholder Derivative Action
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Summary

A current investor in ShengdaTech shares filed a lawsuit against Shengdatech’s senior managers and directors alleging they are responsible for the alleged misrepresentations.
The lawsuit by a current investor in SDTH shares follows a lawsuit filed by investors who (only) purchased shares of ShengdaTech, Inc. between March 15, 2010 and March 15, 2011 against ShengdaTech, Inc. over alleges violations of Federal Securities Laws. According to this complaint filed in the United States District Court for the Southern District of New York the plaintiff alleges that ShengdaTech Inc violated the Securities Exchange Act of 1934 by issuing between March 15, 2010 and March 15, 2011 materially false and misleading statements regarding its business and prospects.

ShengdaTech’s 12months Total Revenue increased from $72.60million in 2006 to $102.12million in 2009. Its Net Income went from $17.53million in 2006 to $23.10million in 2009. For the first three quarters in 2010 ShengdaTech, Inc. reported a combined nine months Total Revenue of $97.89million with a combined nine months Net Income of $20.65million.

Shares of ShengdaTech, Inc. traded during 2007 as high as $14.34 per share and fell during 2009 to as low as $2.97 per share. Since then SDTH shares were able to gain value und traded as recently as October, November, and December 2010 over $6 per share. SDTH shares fell sharp from $6.12 on Dec 8 to $4.67 on Dec 17 and continued to decrease to as low as $4.02 per share on Feb 9. SDTH shares then increased to $4.38 on Feb 16. However, on March 15 the NASDAQ Stock Market (Nasdaq:NDAQ) announced that the trading halt status in ShengdaTech, Inc. (Nasdaq:SDTH) was changed to additional information requested from the company. Trading in the company's stock had been halted on March 15, 2011 at 7:55:20 a.m. Eastern Time for news pending at a last sale price of $3.551. Trading will remain halted until ShengdaTech, Inc. has fully satisfied NASDAQ's request for additional information. The same day ShengdaTech, Inc. (Nasdaq: SDTH), announced that it had appointed a special committee of the Board of Directors to investigate potentially serious discrepancies and unexplained issues relating to the Company and its subsidiaries' financial records identified by the Company's auditors in the course of their audit of the consolidated financial statements for the fiscal year ended December 31, 2010.
ShengdaTech, Inc. also said that due to the pendency of the internal investigation, ShengdaTech will not be able to file its Annual Report on Form 10-K in a timely manner.