SOURCE: Izard Nobel LLP

March 25, 2011 17:23 ET

Izard Nobel LLP Announces Class Action Lawsuit Against ShengdaTech

WEST HARTFORD, CT--(Marketwire - March 25, 2011) - The law firm of Izard Nobel LLP, which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of ShengdaTech, Inc. ("ShengdaTech" or the "Company") (NASDAQ: SDTH) between March 15, 2010 and March 15, 2011, inclusive (the "Class Period"). 

The Complaint charges ShengdaTech and certain of its officers and directors violated federal securities laws by making false and misleading statements regarding the Company's business and prospects. Specifically, defendants failed to disclose the following adverse facts: (i) that ShengdaTech was operating with material deficiencies in the system of internal control over its financial reporting; and (ii) that ShengdaTech's financial statements, during at least 2010, were not fairly presented in conformity with GAAP and were materially misleading.

On March 15, 2011, ShengdaTech announced that it had appointed a special committee of the Board of Directors to investigate discrepancies and issues relating to the Company and its subsidiaries' financial records identified by the Company's auditors. 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 investigation, and that ShengdaTech would not file its 2010 Form 10-K in a timely manner. On this news, trading in the Company's shares was suspended.

If you are a member of the class, you may, no later than May 17, 2011, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members.

While Izard Nobel LLP has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, and your rights, visit: www.izardnobel.com/shengdatech/, or contact Izard Nobel LLP toll-free: (800)797-5499, or by e-mail: firm@izardnobel.com. For more information about class action cases in general, please visit our website: www.izardnobel.com.

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