Longwei Petroleum accused of securities fraud

January 25, 2013 by

Stocks and sharesShares of Longwei Petroleum Investment Holding Limited (NYSE MKT: LPH) fell $1.68 or 72% after a report by Geoinvesting said the China-based oil and gas company exaggerated its main Taiyuan and Gujiao facilities’ November 2012 sales and did not account for an investment of $32 million in a tourism business made by its subsidiary Shanxi Zhonghe Energy Conversion Co., Ltd.

“The company’s purported business operations are massively overstated and a brazen fraud, on an order of magnitude unmatched before by any China-based companies we have seen,” Geoinvesting said in the report.   Additionally, the report said it had little faith in LPH’s auditor, Anderson Bradshaw.  The head of quality control for the auditor, Russell Anderson, was the audit partner of Yuhe International, another China-based company that had been sued by shareholders over misleading statements regarding the acquisition of 13 breeder farms.

Several class action law firms have initiated investigations into whether LPH violated securities laws.  Sales of shares of LPH have been halted since Thursday, January 3, 2013.  LPH disputed the claims made by Geoinvesting and said the blog post has numerous errors, misleading speculations and malicious interpretations of events.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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