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