logo
  Join        Login             Stock Quote

Class Action Lawsuit Commenced Against Schwartz Levitsky Feldman LLP

Wednesday, November 28, 2012 12:06 PM


TORONTO, Nov. 28, 2012 /CNW/ - A class action lawsuit has been commenced against the accounting firm Schwartz Levitsky Feldman LLP. The action arises out of Schwartz Levitsky Feldman LLP's involvement as auditors for a 2010 private placement financing and reverse takeover for Southern China Livestock Inc., a U.S. company with operations based in China.

In 2010, Schwartz Levitsky Feldman LLP acted as the auditor of an indirect U.S. holding company that controlled a Chinese company which claimed to be in the business of breeding and raising commercial hogs in China. On March 29, 2010, Expedite 4, Inc. acquired this holding company in a reverse takeover transaction intended to permit Southern China Livestock Inc. to become a public entity in the U.S. without having to undergo the vetting process traditionally required by the Securities and Exchange Commission (SEC) for new issuers.

After the reverse takeover, and the private placement financing had closed, investors learned that the Chinese company had little, if any, control over its hog farm operations, the business was predominately conducted in cash, and it was therefore highly susceptible to theft and fraud. Notably, the sale of hogs in China was primarily in cash and the cash was handled by employees who maintained the funds in their own bank accounts over which the company had no control. Investors lost in excess of USD $7 million.

Over the past decade, reverse takeover transactions such as that undertaken by Southern China Livestock Inc. were very popular with Chinese companies trying to enter North American public markets. However, beginning in around 2008, securities and accounting regulators in Canada and the U.S. began raising concerns about this practice, including the lack of scrutiny to which these companies have been subject before entering the North American markets. As a result, this practice has now effectively dried up.

The proposed class action is brought by Excalibur Special Opportunities LP, a Toronto-based investment fund, on behalf of the proposed class comprised of all persons or entities who purchased investment units of Expedite 4, Inc. between March 29, 2010 and December 23, 2010 and who continued to hold the units on December 23, 2010.

The statement of claim alleges that Schwartz Levitsky Feldman LLP was negligent in failing to exercise the care, skill and diligence of a reasonably competent auditor of a public company and breached its duty of care to the investors by providing an unqualified "clean" audit opinion of the company's business when the financial statements were not a fair presentation of its financial position.

None of the allegations in the statement of claim have been proven in court, and it is expected the defendant will deny liability.

The Plaintiff is represented by the law firm Paliare Roland Rosenberg Rothstein LLP. More details regarding the claim are available at:

www.southernchinalivestockclassaction.com.

SOURCE: Paliare Roland Rosenberg Rothstein LLP

Margaret Waddell or Jeffrey Larry, Paliare Roland Rosenberg Rothstein LLP, 155 Wellington Street West, 35th Floor, Toronto, Ontario M5V 3H1.

e-mail:  info@southernchinalivestockclassaction.com

Telephone:  416-646-4300

(Source: CNW )
(Source: Quotemedia)

Advertisement
Advertisement



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.