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Abraham, Fruchter & Twersky, LLP Announces Filing of Class Action Lawsuit Against Tongxin International, Ltd.

^{Published on 2011-01-03 15:30:14 - Market Wire}
 

NEW YORK--([ BUSINESS WIRE ])--Abraham, Fruchter & Twersky, LLP commenced a lawsuit in the United States District Court for the Eastern District of New York on behalf of a class (the aClassa) of investors who purchased Tongxin International, Ltd. (aTongxina or the aCompanya) (OTCBB: TXIC) common stock between the period of May 15, 2009 through December 14, 2009 entitled Augenbaum v. Tongxin International, Ltd., et. al., CV11-2011 (E.D.N.Y.)

The Complaint alleges Tongxin and certain of its officers and directors with violating Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by failing to disclose that: (i) the Companya™s financial results, as reported, failed to properly account for certain related-transactions, and as a result, the Company would be unable to file its audited consolidated financial statements for the FY 2009; (ii) the Company would not have earnings growth, particularly in the South East Asian markets, or meet expected earnings guidance; (iii) the Companya™s top officers were conspiring to embezzle Company funds; (iv) the Company lacked adequate internal controls; and (v) the defendants lacked any reasonable basis for the positive statements about Tongxina™s growth and future business prospects.

Starting from June 30, 2010, the Company slowly began to disclose problems previously hidden from the public, including their failure to timely file with the SEC its required audited consolidated financial statements, the delisting of the Companya™s stock on NASDAQ, the Companya™s lowered expected revenues for fiscal year 2010, removal of key executives, and the announcement of the Companya™s legal proceedings against their former Chief Executive Officer and Chief Financial Officer for embezzlement.

In a reaction to this news, shares of Tongxin common stock fell from prices trading as high as $6.16 per share to as low as $1.35 per share, representing a drop of more than 75%.

If you purchased Tongxin common stock between May 15, 2009 through December 14, 2009 and you wish to serve as lead plaintiff in this action, you must move the Court no later than sixty days from the date of this notice. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.

If you would like to discuss this action or if you have any questions concerning this notice or your rights as a potential class member or lead plaintiff, you may contact: Jeffrey S. Abraham or Arthur J. Chen of Abraham, Fruchter & Twersky, LLP toll free at (800) 440-8986, or via e-mail at [ info@aftlaw.com ] or [ achen@aftlaw.com ].

Abraham, Fruchter & Twersky, LLP has extensive experience in securities class action cases, and the firm has been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services.