Case Study: Scott V. ZST Digital Networks

Law360, New York (March 13, 2012, 1:48 PM EDT) -- In Scott v. ZST Digital Networks Inc., No. CV 11-03531 GAF (C. D. Cal. Feb. 14, 2012), the District Court for the Central District of California upheld in part a securities fraud action against a company and its officers that reported different financial results in the United States and in the People's Republic of China.

The defendant company, ZST Digital Networks Inc. (ZST, or the company), a Delaware corporation with its principal place of business in China, was a developer of digital and optical networking equipment for cable operators. The decision is notable for its application of Tellabs Inc. v. Makor...

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