Shareholders Foundation, Inc.

ZST Digital Networks Inc (NASDAQ:ZSTN) Investor Investigation over Possible Securities Laws Violations

An investigation for shareholders of ZST Digital Networks Inc (NASDAQ:ZSTN) over possible securities laws violations was announced and NASDAQ:ZSTN stockholders should contact the Shareholders Foundation.


San Diego, CA -- (SBWIRE) -- 04/04/2012 -- An investigation on behalf of investors in shares of ZST Digital Networks Inc (NASDAQ:ZSTN) over potential securities laws violations by certain officers and directors at ZST Digital Networks Inc was announced.

Investors who purchased shares of ZST Digital Networks Inc (NASDAQ:ZSTN) have certain options and should contact the Shareholders Foundation at mail(at) or call +1(858) 779 - 1554.

The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of ZST Digital Networks Inc (NASDAQ:ZSTN) concerning whether the company, certain of its officers and directors, or others have possibly violated federal securities laws. Specifically, the investigation concerns whether certain statements ZST Digital Networks’ business, its prospects and its operations were potentially materially false and misleading at the time they were made.

ZST Digital Networks Inc (NASDAQ:ZSTN) reported that its annual Revenue rose from $28.72million in 2007 to $134.57million in 2010 and that its Net Income rose from $2.87million in ’07 to $22.09million in 2010. For the first three quarters in 2011 ZST Digital Networks Inc reported a combined 9-months Total Revenue of $125.40million with a combined 9-months Net Income of $19.83million.

Shares of ZST Digital Networks, Inc. (Public, NASDAQ:ZSTN) traded during 2010 as high as over $10 per share, but fell from under $5 per share to as low as $2.60 after on April 21, 2011, a market analyst published a news report revealing a number of red flags of fraud at ZST Digital. Namely, in connection with ZST Digital Networks’ fiscal 2009 and 2008 financial results, the report states that “SEC filings report revenues hundreds of times of what is reported” to the Chinese regulators and the filings show that ZST Digital Networks “paid zero tax in China, but reported substantial amounts to the SEC.” The report also identifies a number of other allegations indicating that ZST Digital Networks has misled investors about its customers. These revelations shocked the market, and caused the price of ZST Digital Networks’ stock to fall.

Then in May 2011 an investor filed a lawsuit for investors who purchased NASDAQ:ZSTN shares between October 20, 2009 to April 21, 2011. The plaintiff alleged that Digital Networks, Inc and certain of its officers, directors, and underwriters violated the federal securities laws between October 20, 2009 to April 21, 2011 by issuing materially false and misleading information in ZST Digital Networks’ offering documents and in SEC filings.

NASDAQ:ZSTN shares continued to decline to as low as $1.58 per share in October 2011.

In September 2011, the plaintiff filed an amended Complaint.

In the first months in 2012, NASDAQ:ZSTN shares were able to climb up above $3 per share in mid-February

Then on March 27, 2012, the NASDAQ Stock Market announced that trading was halted today in ZST Digital for "additional information requested". Trading will remain halted until ZST Digital Networks, Inc. has fully satisfied NASDAQ's request for additional information.

Those who purchased shares of ZST Digital Networks Inc (NASDAQ:ZSTN), have certain options and should contact the Shareholders Foundation..

Shareholders Foundation, Inc.
Trevor Allen
3111 Camino Del Rio North - Suite 423
92108 San Diego
Phone: +1-(858)-779-1554
Fax: +1-(858)-605-5739