FARMINGDALE, NY -- Cemtrex today announced the filing of a federal trade libel and tortious interference lawsuit seeking millions in damages from a short seller of its common stock.

In a filing in US District Court in New York, the EMS firm alleges Ricardo Pearson (aka Richard Pearson) manipulated the market into shorting shares of Cemtrex by publicly disseminating false and libelous statements about Cemtrex through an investor website.

Cemtrex is seeking total damages of $170 million, including punitive damages, money damages and interest.

The suit claims Pearson wrote negative comments about Cemtrex last month on the Seeking Alpha website while having a short position in the company, thus benefiting financially when the stock to gain a financial windfall. The lawsuit’s complaint, which is also being filed with the SEC today as an exhibit to Cemtrex’s current report on Form 8-K, contains a point-by-point rebuttal to Pearson’s claims.

Cemtrex's share price reached a peak in-day trading level of $10.03 on Feb. 17 but plunged to $3.13 on Feb. 22 -- two business days later -- on very heavy volumes. Pearson's analysis and recommendation to short the stock appeared on Seeking Alpha on Feb. 22.

According to a press release issued today by Cemtrex, the defendant is a "veteran short seller and who has been allegedly involved in writing negative articles about and shorting the shares of other companies to manipulate the shares down to profit from the share price collapse."

“We felt this lawsuit was the best course of action to make sure those looking to profit by trying to frighten our investors and customers, and by circumventing appropriate and established channels for raising shareholder concerns, do not use this avenue to do so again,” Cemtrex CEO Saagar Govil said. “This lawsuit is critical to defend the interests of all of the company’s shareholders, recent investors, customers and business partners.”

In his Feb. 22 piece Pearson wrote that the auditor for Cemtrex’s 2014 and earlier financial statements was defunct at the time of these reports, and suggested Cemtrex’s current auditor, Bharat Parikh Associates, was run by a disbarred accountant. Cemtrex denies those allegations.

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