Robbins Umeda LLP Announces an Investigation of RINO International Corporation
Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at RINO International Corporation (“RINO”) (NASDAQ: RINO). RINO, through its subsidiaries, designs, manufactures, installs, and services wastewater treatment and flue gas desulphurization equipment primarily for use in China’s iron and steel industry. RINO was incorporated in 1984 and is headquartered in Dalian, the People’s Republic of China.
Our investigation concerns whether certain of RINO’s officers and directors failed to disclose that the company’s financial results were inflated and inconsistent with results reported by RINO to tax authorities in China. As a result of the inflation, the company was apparently able to consummate a registered direct offering of nearly 3.3 million shares of its common stock at $30.75 per share in December 2009. In addition, our investigation concerns whether certain of RINO’s officers and directors breached their fiduciary duty by allowing the Company to report revenue for the 2008 and 2009 fiscal years based on contracts that RINO never entered into.
On November 10, 2010, Muddy Waters, LLC posted a report about RINO’s business practices, claiming that RINO had inflated revenue and allowed management to use the company’s money to buy a luxury home in Orange County, California. Muddy Waters, LLC also reported a large discrepancy between RINO’s revenue of $192.6 million reported in its fiscal 2009 Form 10-K filed with the U.S. Securities and Exchange Commission, and its revenue of $11 million reported in its annual report for fiscal 2009 filed with the China State Administration of Industry and Commerce. Upon this news, RINO’s stock dropped approximately 15% from a closing price of $13.18 per share on November 10, 2010, to a closing price of $11.10 on November 11, 2010.
Then, on November 18, 2010, RINO concluded that previously issued financial statements for its fiscal years ended December 31, 2008 and 2009, and previously issued financial statements for the periods March 31, 2010, June 30, 2010 and September 30, 2010, should no longer be relied on because the Company did not enter into two contracts for which it has reported revenue for during the 2008 and 2009 fiscal years.
If you are a shareholder of RINO, plan to continue to hold your shares, and would like more information about your rights as a shareholder, please contact attorney Gregory E. Del Gaizo at 800-350-6003 or by e-mail at firstname.lastname@example.org.