LJ International sagging, hit by class action
Shares of gemstone maker LJ International Inc. (Nasdaq: JADE) have lost their shine following news after Wednesday’s close that the company is facing a lawsuit seeking class action status alleging violations of federal securities law.
The law firm of Schatz Nobel Izard P.C. has filed a complaint in the United States District Court for the Central District of California charging that company officials made false and misleading statements about its financial situation. The legal action is on behalf of all persons who purchased shares between Feb. 15, 2007 and Sept. 6, 2007, inclusive.
On July 16, Hong Kong-based LJ International announced that it was delaying the release of its fourth quarter 2006 through second quarter 2007 financial results because its new auditors were “unable to sign off” on the company’s accounting, according to a press release by Schatz Nobel Izard made public before the start of trading.
On Sept. 6, LJ admitted that it had not achieved the fourth quarter and fiscal 2006 financial results it had previously provided on Jan. 8, 2007.
Nancy Kelusa from Schatz Nobel Izard told SmallCapInvestor.com in a phone interview that a lawsuit has not yet been filed and that the involved parties have not yet decided whether to proceed forward.
LJ’s legal troubles include another class action announced on Wednesday, Sept. 19, by New York-based Rosen Law Firm and making the same allegations.
Kelusa said that lead plaintiff motion is due on or before Nov. 19 and if a lawsuit is filed, the court will decide whether to consolidate any legal action.
At 1:38 p.m. ET, LJ International’s (JADE) shares were down $0.50, or 10%, to $4.35. That’s not far from the 52-week low of $3.65, reached on Sept. 29, 2006.
