The environmental remediation company RINO International Corporation has been delisted due to some questionable business practices. RINO had a recent peak of around $20 near the beginning of November and dropped like a rock since then. If you were an owner of RINO between May 28, 2008 and Nov 17, 2010 you have until January 14, 2011 to get in on the action. The class action alleges that :
- That the Company did not enter into at least two customer contracts and 20-40% of the Company’s other contracts had problems for which it reported revenues during its 2008 and 2009 fiscal years
- That the Company’s reported revenues for fiscal year 2009 to the SEC that were inflated by 94%
- That the Company’s management was draining cash from the Company for its own business and personal uses
- That the Company lacked adequate internal and financial controls
- That, as a result of the foregoing, the Company’s financial results were materially false and misleading at all relevant times.
If you are a shareholder who purchased RINO securities during the Class Period, you have until January 14, 2011 to ask the Court to appoint you as lead plaintiff for the class. A copy of the complaint can be obtained at www.pomerantzlaw.com . To discuss this action, contact Rachelle R. Boyle at rrboyle@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
This is a serious blow to the environmental movement since RINO was one of the companies that makes equipment to reduce pollution from industrial processes. If the first issue is true, then RINO was doing a lot less for the environment than they were leading shareholders to believe.
We were bullish on the stock earlier in the year and had identified several limited gain/risk strategies. We had used a 13/12 Bull Put Vertical in October cash in on an upward movement of the stock. Our max loss would have been limited $100 per contract had RINO gone against us. Imagine going from $20/share down to $2. Having an exit strategy using stop loss orders or put options is essential when bad news breaks. Using option credit spreads allows you to exit the stock each month while still collecting premium.