NEW YORK, May 14, 2004 (PRIMEZONE) -- Abbey Gardy, LLP commenced a Class Action lawsuit in the United States District Court for the District of Connecticut (04 CV 802) on behalf of all purchasers of securities of NYFIX, Inc. ("NYFIX" or the "Company") (Nasdaq:NYFXE) between March 30, 2000 and March 30, 2004, inclusive (the "Class Period").
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Complaint names as defendants NYFIX, Inc., Peter Kilbinger Hansen, Richard A. Castillo, Mark R. Hahn, George O. Deehan, William J. Lynch and Carl E. Warden. The Complaint alleges that during the Class Period, the Defendants perpetrated a scheme to artificially inflate NYFIX's stock price by issuing a series of materially false and misleading financial statements and press releases which, among other things, overstated the value of NYFIX Millennium, L.L.C. ("Millennium"), a private company in which the Company held a substantial ownership interest and which represented a substantial portion of the Company's assets during the Class Period.
More specifically, the Company's Form 10-K's filed with the Securities and Exchange Commission ("SEC") for 1999, 2000, 2001 and 2002 and the press releases announcing the financial and business performance of the Company for the fiscal years 1999 - 2003, were materially false and misleading and omitted to state material information because the Company: (a) improperly accounted for its 1999 original investment in, and 2002 acquisition of an additional interest of, Millennium; (b) failed to properly allocate losses incurred by Millennium to the Company; (c) overstated the value of Millennium on the Company's balance sheet; and (d) failed to properly write down Goodwill from the 2002 acquisition of Millennium. The Company failed to properly record $20.1 million in accumulated losses for the years ended December 31, 1999, 2000, and 2001, painting a much different financial picture of the Company than had been disclosed. Defendants perpetrated this scheme in order to enable the Company to raise over $60 million in a public common stock offering and to use the Company's artificially inflated stock (along with the cash raised in the offering) to purchase other companies.
On March 30, 2004, NYFIX issued a press release which stated, "Based on its discussions with the SEC staff, the Company will restate its audited results for the years ended December 31, 1999 through 2002 to change the manner in which it accounted for the 1999 original investment in, and 2002 acquisition of an additional interest of, NYFIX Millennium." The market reacted negatively to this news. On the first day of trading after the announcement, the Company's stock traded on very heavy volume and closed down over 7% at $5.16 per share.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired NYFIX securities during the Class Period. If you purchased or otherwise acquired NYFIX securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased NYFIX securities during the Class Period, you may, no later than July 13, 2004 request that the Court appoint you as lead plaintiff.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiffs." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Abbey Gardy, LLP has been retained as one of the law firms to represent the Class. The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact:
Susan Lee Abbey Gardy, LLP 212 East 39th Street New York, New York 10016 (212) 889-3700 (800) 889-3701 (Toll Free) Or e-mail her at slee@abbeygardy.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca