China Medicine Corporation

China Medicine Corporation (CHME)

MURRAY FRANK LLP is investigating securities fraud claims against China Medicine Corporation (“China Medicine” or the “Company”) (CHME) and certain of its officers, on behalf of purchasers of China Medicine securities between November 30, 2006 and March 23, 2011, inclusive (the “Class Period”).

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The investigation concerns violations of the Securities Exchange Act of 1934 (the “Exchange Act”) that occurred when the Defendants issued materially false and misleading statements during the Class Period regarding China Medicine’s financial performance and business operations and prospects.    

Specifically, it is alleged that during the Class Period, the Defendants made false and misleading statements about or knew but failed to disclose that: (1) the Company’s independent registered public accountant, Frazer Frost, LLP (“Frazer Frost”) failed to conduct its audits of the Company’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board or the Auditing Standards Board; (2) employees of the Company’s wholly-owned subsidiaries had engaged in improper activities in relation to accounting and financial reporting; and (3) as a result, the Company’s financial statements were materially false and misleading.    

On February 22, 2011, China Medicine filed a Form 8-K with the SEC disclosing that on February 15, 2011, Frazer Frost had informed the Company that it would decline to stand for reappointment as the Company’s independent registered public accountant.  On the news, the Company’s stock price dropped from a close of $2.05 per share on February 22, 2011 to $1.80 per share on February 24, 2011.

Subsequently, on March 23, 2011, China Medicine filed a Form 8-K with the SEC announcing that on March 17, 2011, the Company’s Board of Directors had concluded that the Company’s previously issued financial statements contained in its Annual Report on Form 10-K for the fiscal years ended December 31, 2008 and 2009, the Quarterly Reports on Form 10-Q for the periods within fiscal years 2008, 2009 and 2010, related financial press releases and stockholder communications and the reports of Frazer Frost relating to the years ended December 31, 2008 and 2009, should no longer be relied upon.  In addition, the Company reported that certain accounting and reporting errors had been identified regarding improper activities by certain employees at a number of the Company’s wholly-owned subsidiaries.  On this news, the Company’s stock price dropped again, from a close of $1.16 per share on March 23, 2011 to a close of $0.54 per share on March 24, 2011 on unusually heavy trading volume.

If you purchased China Medicine securities within the Class Period, you may move the Court, not later than September 16, 2011, to serve as Lead Plaintiff for the class.  A Lead Plaintiff is a representative chosen by the Court who acts on behalf of other class members in directing the litigation.  You do not need to be a Lead Plaintiff to be included in the class.  If you wish to discuss this investigation, or have any questions concerning this notice or your rights or interests with respect to these matters, please contact us.

Bridget Hamill
[email protected]