Case Update: A New York federal judge certified a class of China North East Petroleum Holdings Ltd. investors and awarded Pomerantz $32.9 million in a default judgment Tuesday after the oil company failed to appear in court in more than a year and a half in a long-running securities fraud suit.
Pomerantz LLP is Lead Counsel in this class action. On August 1, 2012, the U.S. Court of Appeals for the Second Circuit overturned the dismissal of the securities fraud class action Complaint.
Pomerantz filed a class action lawsuit in the United States District Court for the Southern District of New York against China North East Petroleum Holdings Ltd. (China North") (AMEX:NEP), certain of its top officials and a director. The class action (Civil Action No.:10-cv-4775) was filed on behalf of purchasers of China North securities between August 14, 2009 and May 26, 2010, both dates inclusive (the "Class Period"). The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder.
China North is engaged in the exploration and production of crude oil in Northern China. On March 8, 2010, China North 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 needed to be restated. As further disclosed on April 20, 2010, the total adjustments to the Company's net income for the year 2008 and the first three quarters of 2009 are estimated to be more than $28 million. In addition, it is alleged that senior officers of the Company have embezzled monies from the Company.
On May 25, 2010, the Company was delisted from the NYSE AMEX. Thereafter, on May 27, 2010, the Company disclosed the resignation of the Company's Chairman of the Board, CFO, a director, and the placement of the CEO on administrative leave due to preliminarily findings that in 2009, unauthorized cash transfers occurred between the bank accounts of the Company and its subsidiaries and the personal bank accounts of the Company's CEO and a director who is also the mother of the CEO.