SOURCE: Kaplan Fox & Kilsheimer LLP

March 24, 2011 17:06 ET

Kaplan Fox Files Securities Class Action on Behalf of Purchasers of ShengdaTech, Inc. Common Stock During the Period March 15, 2010 Through March 15, 2011

NEW YORK, NY--(Marketwire - March 24, 2011) - Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit against ShengdaTech, Inc. ("ShengdaTech" or the "Company") (NASDAQ: SDTH) that alleges violations of the Securities Exchange Act of 1934 on behalf of purchasers of ShengdaTech common stock during the period March 15, 2010 through March 15, 2011, inclusive (the "Class").

The case is pending in the United States District Court for the Southern District of New York. A copy of the complaint may be obtained from Kaplan Fox or the Court.

The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements to investors by misrepresenting and failing to disclose that: (1) the Company had material deficiencies in its internal controls over its financial reporting, (2) ShengdaTech's financial statements were materially false and misleading and not presented in accordance with GAAP, and (3) Defendants had no reasonable basis for their positive statements about ShengdaTech's business and financial results.

The Complaint further alleges that on March 15, 2011, ShengdaTech shocked investors when it announced 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 audit of the consolidated financial statements for the fiscal year ended December 31, 2010." As a result, trading in ShengdaTech stock halted before the markets opened on March 15, 2011, and the stock has not traded since.

If you are a member of the proposed Class, you may move the court no later than May 17, 2011 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.

Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, or to review a copy of the complaint filed in this action, you may visit our website at www.kaplanfox.com

Contact Information

  • If you have any questions about this Notice, the action, your rights, or your interests, please contact:

    Pamela A. Mayer
    KAPLAN FOX & KILSHEIMER LLP
    850 Third Avenue, 14th Floor
    New York, New York 10022
    (800) 290-1952
    (212) 687-1980
    Fax: (212) 687-7714
    E-mail address: pmayer@kaplanfox.com

    Laurence D. King
    KAPLAN FOX & KILSHEIMER LLP
    350 Sansome Street, Suite 400
    San Francisco, California 94104
    (415) 772-4700
    Fax: (415) 772-4707
    E-mail address: lking@kaplanfox.com