Longwei Petroleum Under Investigation for Allegedly Misleading Investors with False Financials

by InvestorLawyers on January 8, 2013

in Arbitration,Securities Fraud

Investment lawyers are currently investigating claims on behalf of investors in Longwei Petroleum Investment Holding Ltd. As a wholesale petroleum products distributor, Longwei Petroleum deals in storage, transportation, and sales of finished petroleum products in the People’s Republic of China.

Longwei Petroleum Under Investigation for Allegedly Misleading Investors with False Financials

In the latter part of December, Longwei Petroleum reported its sales revenue for October and November 2012. The company reported an increase in sales volume of 26.1% and an increase in product revenue of 35%, year-over year. However, in January, a report by GEOInvesting.com had a disastrous effect on the company’s share price because of the report’s allegations that the company had mislead investors with false financials. The report alleged Longwei Petroleum had exaggerated its November 2012 sales for its Gujiao and Taiyuan facilities. Allegations in the report also stated that the company failed to disclose a Tourism business investment amounting to $32 million. Allegedly, this investment was made by Shanxi Zhonghe Energy Conversion Co. Ltd., a Longwei Petroleum subsidiary.

On January 3, 2013, following the report, Longwei Petroleum’s shares plummeted 72%, or $1.68 per share, to only $0.62 per share during intraday trading. Securities arbitration lawyers say many investors suffered losses as a result of such a significant decline in per share value.

RedChip Research announced that its contract with Longwei will be terminated and research coverage on the company has been suspended until further notice. Furthermore, RedChip Research stated that investors should not rely upon the pervious price target and investment rating, as they are no longer in effect.

Investors who wish to discuss their rights and options may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

Previous post:

Next post: