The fears of every Advanced Battery Technologies (Nasdaq: ABAT) investor came true yesterday when shares tanked after a series of lawyers began circling the company like vultures. The rush of press releases came faster than a Tesla Roadster zipping by the courthouse. Let's go through the day's timeline.

6:53 AM ET: Variant View Research posts a scathing report with 12 reasons to short Advanced Battery Technologies. Among the allegations are claims distribution relationships are fake, unrealistic margins for commodity products and an incredible rise in revenues despite falling headcount. All are very valid and points that kept this Fool cautious about the stock despite seemingly outstanding fundamentals. In full disclosure, Variant was short ABAT at the time of publication, so there was some self-interest.

11:23 AM ET: The Rosen Law Firm announces an investigation into potential securities claims. They include issuing materially false statements to investors and failure to disclose material related party transactions.

3:18 PM ET: Kahn Swick & Foti, LLC joined the party, opening an investigation into the company after the huge 43% one-day price drop.

5:58 PM ET: And just for good measure, Bernstein Liebhard LLP joined the fun by announcing their own investigation.

To be clear, the three law firms are following up on Variant's report. While this Fool doesn't have any concrete confirmation that the claims are true, I find them very plausible.

All the sudden the losses at A123 Systems (Nasdaq: AONE), Ener1 (Nasdaq: HEV) and Valence Technology (Nasdaq: VLNC) look like a kick in the bucket for battery investors. At least we can trust their financial statements (we think).

Get out of China before it's too late?
The sad thing is that this continues a long line of troubles for Chinese companies trading in the U.S., like China MediaExpress (Nasdaq: CCME), Fuqi International (OTC: FUQI.PK) and China Green Agriculture (NYSE: CGA), all of them caught up in similar accusations. Can we trust anything that comes from these companies any more?

I've been skeptical of Advanced Battery Technologies, and while I haven't seen the company as a buy candidate recently, I could have been harder on the company in my analysis. I've learned that if a Chinese company looks too good to be true, it probably is.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.