According to a press release dated March 18, 2011, the complaint charges ShengdaTech and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company and its subsidiaries are primarily engaged in developing, manufacturing and marketing nano precipitated calcium carbonate (“NPCC”) products.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that ShengdaTech was operating with material deficiencies in the system of internal control over its financial reporting; (b) that ShengdaTech’s financial statements, during at least 2010, were not fairly presented in conformity with U.S. GAAP and were materially false and misleading; and (c) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about ShengdaTech’s revenues, expenses, income, margins, markets, growth, average selling prices, and customers.
On March 15, 2011, the Company issued a press release announcing 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 examination of ShengdaTech’s consolidated financial statements for the year ended December 31, 2010. The Company further announced that its audit committee had retained O’Melveny & Myers LLP as independent outside counsel, which had initiated an internal investigation, that the SEC had been notified about the commencement of the internal investigation, and that the Company would not file its 2010 Form 10-K in a timely manner. In response to this unexpected announcement, trading in the Company’s shares was suspended.
On October 15, 2012, the Plaintiffs filed their Consolidated Amended Complaint.
On January 17, 2013, the parties entered into a Stipulation voluntarily dismissing certain defendant from this action.
On August 6, 2013, the plaintiffs filed their Second Consolidated Amended Complaint.
On August 22, 2013, the Court issued an Opinion dismissing the complaint as to certain individual defendants.
On October 28, 2013, the plaintiffs filed their Third Consolidated Amended Complaint.
On July 1, 2014, the Court issued an Order denying the motion to dismiss of a certain defendant. On August 12, the Court did grant the motions to dismiss of other certain defendants, and dismissed them from this action.
Final approval of a Settlement was granted on September 25, 2015, and this case was dismissed with prejudice.