Recent disclosures that warrant investigations.
On July 16, 2007, LJ International (NASDAQ: JADE, BullBoards), which is reported to be one of the fastest growing jewelry companies in the world and, through its ENZO brand, the largest foreign jewelry retailer in China, announced a delay in the filing of its annual report for the fiscal year ended December 31, 2006 with the Securities and Exchange Commission.
The Company indicated that "[t]he delay in the filing is principally the result of the need for additional time by the company's new independent registered accounting firm to complete its audit of the company's 2006 financial statements. The company appointed its new independent registered accounting firm on June 1, 2007."
Following the announced filing delay, the company's share price dropped as much as 8.5% on July 17. Since the announcement, shareholders have lost 48%.
Following the company's announcement, the Nasdaq Stock Market announced that LJ International was in danger of being delisted for failure to comply with the listing requirements of the exchange.
Pall, Inc. Initiates Inquiry
On July 19, 2007, after the close of trading, Pall (NYSE: PLL, BullBoards), the East Hills, New York based maker of water filtration and purification products, disclosed that a board committee began an inquiry into a possible material understatement of U.S. income tax payments and of its provision for income taxes in certain prior periods beginning with fiscal 1999. The company stated that it notified the Internal Revenue Service and the Securities and Exchange Commission of the inquiry.
The market reacted strongly to this news. On July 20, 2007, Pall shares declined $7.67 per share or approximately 16% from the stock's closing price on July 19, 2007.
Troubling Disclosures at W Holding Company, Inc.
Puerto Rico-based W Holding Company (NYSE: WHI, BullBoards) disclosed that on June 19, 2007 it determined that one of the larger asset-based loans, which originated at its asset-based lending division is impaired. The company also disclosed that there is a significant collateral deficiency with respect to this impaired loan.
The company stated in a regulatory filing "on a preliminary basis, management believes the collateral deficiency to be at least $80 million."
The company's Audit Committee decided to have an independent firm retained to review the impaired loan as well as the complete asset-based lending portfolio and the asset- based lending division's systems of internal controls.
We are investigating these three situations and if you are an affected investor in any of these companies you may wish to contact us.
Mark McNair is an attorney in private practice who represents investors in securities litigation and was formerly an attorney at the Securities and Exchange Commission. For additional information, go to securitiessleuth.com
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