By Thom Weidlich
Dec. 31 (Bloomberg) -- Nasdaq Stock Market won a federal judge?s permission to delist a Chinese maker of wind towers over its objection that the procedures for kicking it out are marred by bias.
U.S. District Judge Richard J. Sullivan yesterday lifted the restraining order imposed against Nasdaq by New York State Supreme Court Justice Melvin Schweitzer on Dec. 20. Sullivan also denied a request by CleanTech Innovations Inc., based in Tieling, China, that he impose his own temporary restraining order.
?The court finds that the state court lacked jurisdiction to enter a temporary restraining order in a matter arising under? the federal securities law, Sullivan wrote in his order. The U.S. Securities and Exchange Commission on Dec. 28 also denied CleanTech?s request for a stay, which the company can appeal to the federal court rather than the court imposing its own restraining order, Sullivan said.
CleanTech has been fighting removal since January, when Nasdaq asserted that the company, which makes towers for wind turbines, intentionally withheld material information about $20 million in financing during its listing application. The company says it provided all necessary information in a timely manner.
CleanTech has retained as counsel former U.S. Senator Arlen Specter, who represented Pennsylvania as a Republican before becoming a Democrat in 2009.
?Discriminatory Actions?
?Judge Sullivan?s ruling is a technical procedural ruling that doesn?t touch on the substance of the discriminatory actions by Nasdaq against China-based reverse-merger companies,? Blair Fensterstock, a lawyer for CleanTech, said in a phone interview. ?The company intends to take every action possible to pursue the discriminatory actions of Nasdaq and its staff.?
CleanTech alleged the exchange violated its own rules and the company?s right to due process in ?arbitrarily and capriciously? seeking to remove it. Nasdaq?s practices are ?racially motivated? and ?blatantly discriminatory,? aimed at delisting Chinese companies, according to the complaint.
?The staff made it clear that they were looking through a different scope at China-based companies and that whether or not a company and or its advisers had a good reputation was irrelevant,? Fensterstock said.
Auditor Resignations
The court action is part of the fallout from a series of cases alleging fraud involving China-based companies. Chinese shares trading in the U.S. have lost more than $10 billion in market value this year after companies such as Longtop Financial Technologies Ltd. and China MediaExpress Holdings Inc. disclosed financial irregularities or auditor resignations.
Concern has focused on the more than 400 Chinese businesses that have used reverse mergers -- buying public shell companies to gain stock market listings in North America while avoiding the scrutiny of an initial public offering.
The SEC in June cautioned investors about buying stakes in reverse merger companies, saying they may be prone to ?fraud and other abuses.? From 2005 to 2010, Nasdaq approved the listing of more than 55 Chinese reverse mergers, according to a tally by Bloomberg News.
Nasdaq approved CleanTech?s listing in December 2010 and issued a delisting notice a month later, saying the company intentionally failed to disclose material information about bridge financing of $20 million that it received in December, just after the listing.
CleanTech has responded that it had no idea when or whether Nasdaq would approve the listing and that it disclosed the transaction as required without withholding any information.
The case is Cleantech Innovations Inc. v. Nasdaq Stock Market LLC, 11-cv-9358, U.S. District Court, Southern District of New York (Manhattan).
--With assistance from Dune Lawrence in New York. Editors: Mary Romano, Peter Blumberg
To contact the reporter on this story: Thom Weidlich in Brooklyn, New York, federal court at tweidlich@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.
Source: http://c.moreover.com/click/here.pl?r5683672366&f=378
syracuse university best buy black friday 2011 ads broncos jets jessie james clayton kershaw osu basketball dale sveum
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.