Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/fushi/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Middle District of Tennessee on behalf of purchasers of Fushi Copperweld, Inc. (“Fushi”) (NASDAQ:FSIN - News) securities during the period between August 14, 2007 and May 4, 2011 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from May 6, 2011. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/fushi/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Fushi and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Fushi is a producer of bimetallic wire products, principally copper-clad aluminum and copper-clad steel products.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business practices and financial results. As a result of defendants’ false statements, Fushi stock traded at artificially inflated prices during the Class Period, reaching a high of $27.00 per share in December 2007.
On March 11, 2011, Fushi issued a press release announcing its preliminary fourth quarter and full year 2010 earnings results. Additionally, the Company announced it was reevaluating the application of Generally Accepted Accounting Principles (“GAAP”) in certain accounting treatments applied to its 2007, 2008 and 2009 financial results and its previously filed quarterly financial statements for the first three quarters of 2010. On this news, Fushi shares dropped by $1.68 per share, to close at $7.74 per share on March 16, 2011 – a three day decline of 18%.
Subsequently, on March 29, 2011, Fushi filed a Form 8-K with the SEC disclosing that its Audit Committee had concluded that the Company’s previously reported financial statements for the years ended December 31, 2009, 2008 and 2007 and its unaudited interim financial statements for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010 should be restated and should no longer be relied upon. On this news, Fushi shares dropped by $0.19 per share, to close at $8.12 per share on March 30, 2011, a one-day decline of 2.3% per share.
Then, on May 4, 2011, Fushi issued a press release announcing its first quarter 2011 financial results. The Company reported revenue of $65.9 million and net income of $6.8 million, or $0.18 diluted earnings per share (“EPS”), below analysts’ estimates of EPS of $0.23. On this news, Fushi’s stock dropped again and began a steady decline from $8.46 per share on May 3, 2011, to $7.05 per share on May 19, 2011.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) Fushi was improperly applying hedge accounting to a cross currency interest swap derivative entered into in April 2007; (b) Fushi failed to recognize changes in the fair value of the April 2007 swap in its earnings during the Class Period, inflating its reported net income by material amounts; (c) Fushi misstated its net income for 2007, 2008, 2009 and for the quarters ended March 31, 2010, June 30, 2010, and September 30, 2010; (d) Fushi had material deficiencies in its internal controls over its financial reporting; (e) Fushi’s financial statements were not fairly presented in conformity with GAAP; and (f) Fushi’s business was not as healthy as represented by defendants.
Plaintiff seeks to recover damages on behalf of all purchasers of Fushi securities during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site (http://www.rgrdlaw.com) has more information about the firm.
Source:BUSINESS WIRE