After transferring the company, Shanxi Puda Coal Group Co., Puda sold shares to investors who lost millions when the fraud became public, said the investor, Thomas Tarsavage, according to a complaint in Manhattan’s U.S. District Court.
“Puda insiders improperly transferred the company’s only revenue-producing operating subsidiary to CITIC and then, with the assistance of CITIC, falsely portrayed to investors in Puda that the company still possessed its operating subsidiary,” said the filing.
In his suit, Tarsavage seeks to represent investors who owned Puda shares from July 2010 to October 2011. Tarsavage is also suing CITIC under the auspices of derivatives fraud.
