Shareholder Class Action Filed Against SinoTech Energy

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of those who purchased or otherwise acquired the American Depository Shares of SinoTech Energy

between November 3, 2010 and August 16, 2011, inclusive, including purchasers of SinoTech's shares that were issued pursuant or traceable to the Company's Initial Public Offering on or about November 3, 2010. The Complaint charges SinoTech and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Complaint also charges SinoTech, certain of its officers and directors, certain underwriters and the Company's former accounting firm with violations of the Securities Act of 1933. SinoTech describes itself as a provider of enhanced oil recovery services in China. More specifically, the Complaint alleges that the defendants failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company's only import agent, who accounted for over $100 million worth of oil drilling equipment orders, was a shell company with no operations; (2) that the Company's sole chemical supplier was a shell company with little or no revenues; (3) that the Company's largest subcontracting customer, which provides the majority of SinoTech's revenues, had minimal revenues and unverifiable operations; (4) that the Company's financial results filed with the SEC were inconsistent with financial filings made to Chinese authorities; (5) that the Company had engaged in undisclosed related-party transactions; (6) that as a result, the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (7) that the Company lacked adequate internal and financial controls; (8) that, as a result of the foregoing, the Company's positive public statements and its financial statements were materially false and misleading at all relevant times; and (9) that the Offering Materials issued in connection with the Company's November 3, 2010 IPO were materially misleading and inaccurate at the time they were issued. On August 16, 2011, research analyst Alfred Little published a report entitled "SinoTech Energy: Enhanced Oil Recovery or Capital Extraction?". The Report contained a number of shocking revelations based on Alfred Little's research into SinoTech, including that the Company's sole import agent, sole chemical supplier, and five largest subcontracting customers, all appeared to be shell companies with little or no actual operations. The Report also revealed that the Company's oil drilling technology was questionable, mispriced and uncompetitive. Additionally, the Report revealed that the Company's financial statements as filed with the Chinese Government's State Administration of Industry and Commerce differed from those that the Company filed with the SEC, and indicated that SinoTech had negligible business operations. Moreover, the Report revealed that the Company's board of directors lacked independence and effective oversight of SinoTech management, as evidenced by undisclosed related party dealings. Upon the release of this news, the Company's shares declined $1.67 per share, or over 41 percent, to close on August 16, 2011 at $2.35 per share, on unusually heavy trading volume. Later on August 16, 2011, and following the publication of the Report, NASDAQ halted trading in the Company's ADS, and stated that they would remain halted until the Company "fully satisfied NASDAQ's request for additional information."