Legal
ZST Technologies

Chinese Reverse Merger Sponsor WestPark Settles Class Action Suit by ZST Shareholders

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WestPark Capital and its founder Richard Rappaport have settled a class action suit brought by ZST Digital (ZSTN) shareholders who bought the stock from the Los Angeles-based investment banking firm. A judge in the U.S. District Court for the Central District of California found that ZST shareholders could sue Rappaport and litigate to hold him liable for the fraud conducted by Chinese executives of ZST during their initial public offering. WestPark and ZST agreed to the settlement in March just as another shareholder, Peter Deutsch, was winning court orders to raid ZST’s CFO home for company documents and computers. The California class action case, which was litigated for the last two years by New York-based law firm Frank & Bianco, offers participating ZST shareholders a lump sum of $1.7 million. Settlement filings by the plaintiffs lawyers estimate this is around 40 cents on the dollar.

Legal
Ingen

Ingen Troubles Continue in NIR Fund Liquidation

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Money owed from a 2006 convertible PIPE issued by Ingen Technologies (IGNT) is still an issue for liquidators of NIR Group's AJW funds and New Millennium Capital Partners. AJW liquidators Ian Stokoe and David Walker filed suit against Ingen on May 10, and they are seeking relief related to a $2.6 million judgment from an earlier legal contest between AJW and Ingen.

The suit was filed in the New York State Supreme Court. The liquidators of several AJW offshore funds once managed by NIR Group obtained recognition of their proceedings in the U.S. through Chapter 15 bankruptcy proceedings earlier this year. Former NIR head Corey Ribotsky has filed court papers objecting to claims and tactics of the liquidators. A suit by filed by regulators alleging accounting fraud against Ribotsky is pending.

Legal

Xumanii, Promoters Sued over Deluge of Spam Email

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While many people have learned to ignore spam emails touting microcap companies, San Diego resident George Sharp decided to take the issue to court. Sharp filed a lawsuit in San Diego’s Superior Court alleging wrongdoing on the part of numerous issuers including Xumanii (XUII) and Pharmagen (PHRX) and several publishers of stock promotion materials, including Centro Azteca S.A. and Victory Mark Corp. Ltd. “I am tired of the spam and the use of it to steal money from those who are easily susceptible to get-rich schemes, like seniors, students and single mothers,” Sharp told Growth Capital Investor. “The people who conduct these schemes deserve a special place in hell.”

Sharp contends that he received over 1,200 spam emails from promoters who ignored dozens of his attempts to unsubscribe from the email services.

Legal

RINO Cooked Books, SEC Says

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RINO International Corp. (RINO) executives David Zou and Amy Qiu agreed to pay back $3.5 million after regulators charged them with keeping two highly divergent series of accounts and diverting funds for personal use. RINO, which provides services to China's steel industry, formed through a reverse merger with shell Innomind and Jade Mountain Corp. in 2007. The reverse merger was funded by two dozen investors who put $24.5 million into the company, according to the SEC.