Rochon Genova LLP Announces Class Action Against Sino-Forest Corporation, Auditors, Underwriters - June 8, 2011.
Investors seek billions in compensation, citing misrepresentations in relation to company's assets and revenue.
TORONTO, June 8, 2011 - Rochon Genova LLP has commenced a class action on behalf of shareholders of Sino-Forest Corporation ("Sino-Forest") (TSX: TRE.TO and OTC: SNOFF.PK) alleging securities law violations by the company, certain of its officers and directors, its auditors, and underwriters.
Sino-Forest operates as a forestry plantation company in the People's Republic of China. The company acquires, cultivates, and sells standing timber or harvested logs from its purchased, integrated, and planted plantations, and sources and sells logs, veneer, sawn timber, and other wood-based products.
The class action has been brought on behalf of Sino-Forest shareholders who purchased shares of Sino-Forest on the TSX on or after May 17, 2004 and on behalf of those who purchased shares directly through the company's 2009 prospectus offering. It alleges misrepresentations in Sino-Forest's filings, including the 2009 prospectus offering, press releases and public statements that, among other things, greatly exaggerated the company's assets and revenues. The allegations are not yet proven. As of market close on June 7, 2011, shares of Sino-Forest had dropped over 75% since June 2, 2011 resulting in a market loss of almost $3.5 Billion. This precipitous decline in the company's value followed the release of a report, and supporting documentation, by Muddy Waters, LLC, a Hong Kong-based research and investment firm, which revealed detailed evidence of systemic and comprehensive fraud and illegal activity by Sino-Forest.
Muddy Waters alleges that the company exaggerated its assets by overstating its timber purchases, including one purchase from the Yunnan region in China that was inflated by over $800 million. It further states that Sino-Forest inflated its revenues through the use of undisclosed "authorized intermediaries" to fabricate sales transactions for which there is no supporting documentation. The intermediaries were allegedly employed to create an accounting event for Sino-Forest even though it risked no capital and moved no physical goods.
For more information, please contact Joel Rochon at firstname.lastname@example.org or John Archibald at email@example.com. Rochon Genova LLP is one of Canada's leading class action firms dedicated to protecting the interests of individual and institutional investors.