China Expert Technology, Inc. (fka CXTI)

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NEWS!

In 2007, shareholders filed a securities-fraud lawsuit against e-commerce company China Expert Technology Inc. (CXTI.PK), claiming it had forged 16 different Chinese government contracts, overstating the value of its revenue in public filings by $131 million. The company never responded to the complaint and was found to be in default in January 2008. Three years later, the plaintiffs still haven't even attempted to calculate damages and collect, according to the shareholders' lawyer, Phillip Kim of New York's Rosen Law Firm. Kim said any effort to collect at this point would be futile, since the company has moved its assets out of jurisdictions accessible to U.S. investors. The company still trades as a penny stock in the United States. Messages sent to a company e-mail address seeking comment bounced back, and phone calls were not answered.

With China Expert out of reach, in October 2009 Kim amended the complaint to add as defendants the company's auditors, PKF Hong Kong and BDO McCabe Lo Limited. Last week, U.S. District Judge Alvin Hellerstein of the Southern District of New York granted the defendants' motion to dismiss, finding that the plaintiffs had not adequately demonstrated how the auditing firms violated accounting rules. But he gave the plaintiffs six weeks to re-file.

Kim, whose six-lawyer firm typically files dozens of se



http://www.reuters.com/article/2011/02/14/china-lawsuits-idUSN1429211020110214