Law Offices of Howard G. Smith, representing investors of Fuqi International, Inc., which is parent company of British Virgin Islands-registered Fuqi International Holdings Co., Ltd., has filed a class action lawsuit in the Court for the Southern District of New York on behalf of a class consisting of all persons or entities who purchased the securities of the company between May 15, 2009 and March 16, 2010. The complaint charges Fuqi and some of its executive officers with violations of federal securities laws. The defendants are also alleged of misrepresenting and/or failing to disclose material adverse facts concerning company’s business, operations and prospects throughout the Class Period. As a result of this, company’s financial statements were materially false and misleading.
On March 16, 2010, Fuqi International disclosed that it had identified certain errors related to the accounting of company’s inventory and cost of sales, and the result of the accounting errors was expected to have a material impact on company’s previously issued financial statements for the first three quarters of 2009. In addition, the company announced that its financial statements for this period should no longer be relied upon, and it was intended to file amendments disclosing the effect of the accounting errors.