Abraham Fruchter & Twersky LLP Announces Class Action Suit Against China Energy Savings Technology, Inc.)
NEW YORK, NY, May 19, 2006 (MARKET WIRE via COMTEX) -- Abraham Fruchter & Twersky LLP today announced that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of China Energy Savings Technology, Inc. ("China Energy") (NASDAQ: CESV) common stock during the period between April 21, 2005 and February 15, 2006 (the "Class Period").
The complaint charges China Energy and certain of its officers and directors with violations of the Securities Exchange Act of 1934. China Energy engages in the development, manufacture, sale, and distribution of energy-saving products for use in commercial and industrial settings in the People's Republic of China. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. As a result of defendants' false statements, China Energy stock traded at artificially inflated prices during the Class Period. On February 15, 2006, after the market closed, the NASDAQ announced that trading was halted in China Energy stock for "additional information requested" from the Company at a last price of $6.82. As of May 18, 2006, trading in China Energy's stock remained halted.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company's accounting department suffered from material weaknesses and deficiencies and lacked the necessary staff and resources to perform its required functions; (b) contrary to representations contained in the Company's SEC filings, the Company's internal controls were inadequate and easily manipulated; (c) the Company lacked effective internal controls in its financial reporting process required to enable it to properly analyze and/or estimate China Energy's future financial and operational performance; (d) China Energy was improperly recognizing revenue associated with its long-term energy-sharing service agreements by recognizing revenue before it was earned and realizable; (e) China Energy's January 2006 private placement was fraught with self-dealing; and (f) China Energy was experiencing inside and/or self dealing transactions in the Company's stock by insiders, its executives and/or members of its Board of Directors which could lead to trading of its stock being halted by the NASDAQ.
Plaintiff is represented by Abraham Fruchter & Twersky LLP and seeks to recover damages on behalf of all purchasers of China Energy common stock during the Class Period (the "Class"). If you wish to serve as lead plaintiff, you must meet certain legal requirements set forth in the applicable law and file appropriate papers with the Court no later than 60 days from May 1, 2006. You do not need to seek appointment as a lead plaintiff in order to share in any recovery. Under certain circumstances, one or more Class members may together serve as lead plaintiff. You may retain Abraham Fruchter & Twersky, LLP, or other counsel of your choice, to serve as your counsel in this action or you may choose to do nothing and remain an absent class member.
If you have any questions concerning this case or your rights or interests with respect to this matter, please contact plaintiff's counsel: Jack G. Fruchter, Esq. or Ximena Skovron, Esq. of Abraham Fruchter & Twersky, LLP, One Penn Plaza, Suite 2805, New York, New York 10119, by telephone at (212) 279-5050 or toll free at (800) 440-8986, by facsimile at (212) 279-3655, or by e-mail at jfruchter@aftlaw.com or xskovron@aftlaw.com.
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