| Company: | China North East Petroleum |
| Ticker Symbol: | NEP |
| Class Period: | Aug-14-09 to May-26-10 |
| Date Filed: | Jun-14-10 |
| Lead Plaintiff Deadline: | Aug-13-10 |
| Court: | Southern District of New York |
| Allegations: | |
The Complaint names China North East and certain of the Company's executive officers and directors. The Complaint alleges that during the Class Period, defendants made false and/or misleading statements and/or failed to disclose the truth concerning the Company's financial statements. On March 8, 2010, China North East disclosed that the Company had determined that its financial statements for the year ended December 31, 2008, and each interim quarter within that year, and for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009 should no longer be relied upon and should be restated as a result of certain non-cash errors contained therein regarding the accounting for: (i) warrants issued in conjunction with a secured debenture on February 28, 2008, which warrants should have been classified according to Emerging Issues Task Force 00-19 as liability instruments rather than equity instruments; (ii) the change in the fair value of those warrants from the date of issuance through the end of the reporting period; (iii) effective interest expense arising from amortization of the discount to the carrying value of the secured debenture; (iv) the recording of warrants issued to investment consultants in connection with the secured debenture as deferred financing costs instead of consulting fees; (v) the amount of amortization of deferred financing costs associated with the issuance of that secured debenture; (vi) amounts payable to a consultant included in accrued liabilities; (vii) compensation issued to employees in the form of stock; (viii) depreciation, depletion and amortization of oil producing properties; (ix) ceiling test reduction of the net carrying value of oil producing properties; (x) income tax expense for the above items; and (xi) minority interests for certain of the above items.
Subsequently, on May 27, 2010, the China North East issued a press release, announcing that the Company's stock had been halted by the AMEX because of non-compliance with AMEX's listing criteria. China North East stock has not resumed trading since that time. Furthermore, the Company also disclosed the resignation of the Company's Chairman of the Board, CFO, a director, and the placement of the CEO on administrative leave pending the outcome of the current forensic audit. The forensic audit preliminarily found that in 2009, cash transfers occurred between the bank accounts of the Company and its subsidiaries and the personal bank accounts of Hongjun Wang, the Company's CEO, and Guizhi Ju, a Company director and mother of Hongjun Wang.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
