Scott+Scott LLP Files Securities Class Action Lawsuit Against SinoHub, Inc. -- Formerly NYSE:SIHI
NEW YORK, Nov. 20, 2012 (GLOBE NEWSWIRE) -- Scott+Scott LLP filed a class action complaint in the United States District Court for the Southern District of New York on behalf of purchasers of SinoHub, Inc. ("SinoHub" or the "Company") common stock during the period between May 17, 2010 and August 21, 2012 (the "Class Period"), seeking remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
If you purchased the common stock of SinoHub during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than January 21, 2013. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott (firstname.lastname@example.org, (800) 404-7770, (860) 537-5537) or visit the Scott+Scott SinoHub website for more information:
There is no cost or fee to you.
The securities class action charges SinoHub and certain of its officers and directors with violations of the Exchange Act. The Company, together with its subsidiaries, operates as an electronics company worldwide. SinoHub is headquartered in Shenzhen, People's Republic of China.
The complaint charges, throughout the Class Period, Defendants maintained that SinoHub's internal controls over financial reporting were effective. However, as evidenced by the Company's correspondence with the U.S. Securities and Exchange Commission regarding the Company's internal controls, Defendants knowingly or recklessly implemented, or ignored the existence of, ineffective internal controls which ultimately resulted in the use of improper accounting procedures and the overstatement of the Company's financial statements and future earnings potential.
On May 16, 2011, to the surprise of investors, the Company announced it would be restating its Form 10-K for 2010 and Form 10-Qs for all three quarters in 2010 due to material misstatements of liabilities and expenses, and significant deficiencies in internal control. The market reacted negatively to the news and on May 16, 2011, SinoHub's stock price dropped from an opening price of $1.76 per share to a closing price of $1.36, a 23% decline in one trading day.
Thereafter, on March 30, 2012, the Company released its Form 10-K Annual Report for 2011, which revealed that SinoHub had not experienced any revenue growth during the year. SinoHub's stock price responded accordingly, closing at $0.54 per share on March 30, 2012 after opening that day at $0.63 per share, a single day decline of 16%. The complaint alleges, however, SinoHub continued to represent in its Form 10-K for 2011 that the Company had remediated its internal control problems and that SinoHub's internal controls were now "effective."
On August 14, 2012, the Company shocked investors when it announced that it would be unable to file its Quarterly Report on Form 10-Q for June 30, 2012 within the prescribed time period. The Company stated that it expected to file the report within an extension period. Upon the disclosure of this information, and over the next three trading days, SinoHub's stock declined approximately 26% on unusually high trading volume.
Finally, on August 21, 2012, the last day of the Class Period, SinoHub announced that it would not file its Form 10-Q within the extension period as a result of a delay in the Company's retrieval of information requested by the Company's auditors to confirm prior-period sales. The Company announced results for the quarter ended June 30, 2012, stating that it had suffered a net loss of $2.7 million. Over the next three trading days SinoHub's stock price dropped by 20%. The Company's stock has now been delisted by the NYSE.
Scott+Scott has significant experience in prosecuting major securities, antitrust, and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide.