Longwei Petroleum (fka LPIH)

[MorningLightMountain]

i. Michael Toups

http://www.faruqilaw.com/get_file.php?id=325f708191dd5e65419db5ce86afdeff485

Plaintiffs clearly allege scienter for CFO Michael Toups. Toups was responsible for
Longwei’s financial reporting and internal controls, and touted the company’s “real time”
electronic inventory monitoring, making it likely that he was aware of Longwei’s true
productivity during the class period. (CAC ¶ 202.) At the very least, his role in financial
reporting should have alerted him to Longwei’s sudden rise in revenues and history of
inadequate financial controls. Toups also claims to have spent “considerable” time in Taiyuan,
where he likely observed the inactivity of the nearby storage facility. (Id. at ¶ 209.) Given the
allegedly massive scale of the fraud, obvious to even a casual observer of Longwei’s facilities,
the pleadings support an inference of Toups’ scienter. See Katz v. Image Innovations Holdings,
Inc., 542 F. Supp. 2d 269, 273 (S.D.N.Y. 2008) (“[T]he magnitude of the alleged fraud provides
some additional circumstantial evidence of scienter.”).