Post-Fraud Stock Surge Doesn't Bar Suit, 2nd Circ. Says

Law360, New York (August 1, 2012, 6:43 PM EDT) -- Stockholders may sue to recover losses from a company's fraud even if the company’s stock price recovered soon after the fraud was revealed, the Second Circuit said Wednesday in a precedential decision that revived putative class action claims against a Chinese energy firm.

A three-judge panel reversed a New York federal court’s Oct. 6 decision throwing out claims by shareholders of China North East Petroleum Holdings Ltd. The company was delisted from the New York Stock Exchange in May 2010 after it was forced to withdraw...
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