BALA CYNWYD, Pa., Aug. 13, 2001 (PRIMEZONE) -- Schiffrin & Barroway, LLP announced today that it recently filed lawsuits against Exodus Communications, Inc., U.S. Wireless Corporation, PSS World Medical, Inc. and Immune Response Corporation for violations of the federal securities laws.
If you purchased the securities of any of the companies listed below during the respective class periods, you may be a member of the class and have until the date specified to move the court to become the lead plaintiff. For more information on a particular lawsuit and to view the complaint, you may visit our Website at www.sbclasslaw.com. To learn more about your rights and interests in these cases and your ability to potentially recoup your losses, please contact Schiffrin & Barroway directly at 888-299-7706 (toll free) or 610-667-7706, fax number 610-667-7056 or by e-mail at info@sbclasslaw.com.
EXODUS COMMUNICATIONS, INC. (Nasdaq:EXDS) (3/30/01 - 6/20/01). The complaint charges Exodus and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that the defendants were alarmed by the dramatic decline in Exodus' share price, which had declined from over $28 per share in late January to $10 per share by mid-March 2001. Furthermore, the complaint alleges that defendants then formulated a plan to not only halt the erosion of Exodus' share price, but reinflate it as well. Exodus' high stock price was dependent upon the appearance of its phenomenal growth rate. However, by March 2001, the complaint claims that defendants were aware that Exodus' business was falling victim both to the general economic slowdown and the bursting of the Internet bubble. Realizing that the public disclosure of Exodus' slowing growth rate would cause Exodus' stock price to decline, it is alleged that defendants issued a series of false and misleading statements designed to keep Exodus' stock price high while certain defendants sold over 441,667 shares of Exodus common stock for proceeds of over $4.1 million.
On June 20, 2001, the complaint alleges that Exodus revealed that, contrary to defendants' prior statements regarding the Company's results for the second quarter 2001 and for the 2001 fiscal year, its revenue would be significantly below expectations (and actually declined sequentially) due to a decrease in the rate of new customer installations, an increase in the rate of cancellations, reduction of orders from existing customers and an increase in reserves related to Internet company failures. This revelation shocked the market, causing Exodus' stock to plummet over 30% to $1.59 per share the following trading day on record volume of more than 185 million shares. The complaint was filed in the U.S. District Court for the Northern District of California. The lead plaintiff motion must be filed no later than September 10, 2001.
U.S. WIRELESS CORPORATION (Nasdaq:USWC) (Nasdaq:USWCE) (Class Period: 7/14/98 - 5/25/01). The complaint charges U.S. Wireless and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that during the Class Period, in order to conceal their self dealing transactions, defendants caused the Company to falsely report its results for fiscal 2000 through improper characterization of the benefit and the beneficiaries of the issuance of shares of the Company's stock. As a result of this mischaracterization, the Company's net loss attributable to common shareholders was understated by $6.2 million, or 35%. Ultimately, U.S. Wireless revealed that its results for fiscal 2000 were in error and would be restated to record the share issuances at fair market value and record a loss of $5.3 million for the shares and $0.9 million for certain tax effects. Absent defendants' improper accounting, the Company would have reported much less favorable fiscal 2000 earnings. On May 29, 2001, Nasdaq issued an unusual press release entitled "Nasdaq Halts Trading of U.S. Wireless Corporation and Requests Additional Information from Company." As a result of this news, U.S. Wireless shares were halted from trading at $2.91, 88% lower than the Class Period high of $24.50. The complaint was filed in the U.S. District Court for the Northern District of California. The lead plaintiff motion must be filed no later than September 10, 2001.
PSS WORLD MEDICAL, INC. (Nasdaq:PSSI) (Class Period: 10/26/99 - 10/03/00). The complaint charges PSSI and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that hroughout the class period, defendants issued multiple press releases and filed quarterly reports and an annual report with the Securities and Exchange Commission which materially overstated the Company's net income in violation of Generally Accepted Accounting Principles. On June 22, 2000, Defendants issued a press release announcing its year end results and the fact that it had entered into a definitive stock-for-stock merger agreement with Fisher Scientific International, Inc. ("Fisher"). The market reacted favorably to this announcement because of the value of the exchange ratio of Fisher's shares. One of the key terms of the merger, which was belatedly disclosed by the Company, was that the Company had to report EBITDA of not less than $23 million for the quarter in order for the merger to be consummated. In an August 8, 2000 press release, defendants announced that they were in compliance with this provision of the merger agreement and that the merger was expected to proceed.
On September 1, 2000, the Company issued a press release reporting that the merger agreement had been terminated. In response to this announcement, the market reevaluated the true value of PSSI's shares, which had been buoyed by the potential exchange value of Fisher's stock during the Class Period, and, accordingly, shares of PSSI's stock, which had closed at $6 3/8 prior to announcement of the merger termination, closed at $4 13/16 on an inordinate volume of 5,730,200 shares upon dissemination of the news. As the sell-off continued, the price of the Company's stock settled into the range of approximately $2 3/4 - $3 3/4.
While Fisher had abandoned the merger because of the results of its own due diligence review of the Company's books and records, the public only became aware of the truth on June 27, 2001. On that date, PSSI filed its Form 10-K for the fiscal year ended March 31, 2001 with the SEC and disclosed, for the first time, the fact that the Company's internal controls over inventory, accounts payable, sales, and accounts receivable were, at all relevant times, materially deficient and that the Company had previously issued financial statements for the quarter ended June 30, 2000 which were materially misleading. As a result of these problems, the Company would be forced to restate its previous financial data, and would also cause the Company's EBITDA to be reduced, below the threshold that would have allowed the merger to be completed. The complaint was filed in the U.S. District Court for the Middle District of Florida. The lead plaintiff motion must be filed no later than September 11, 2001.
IMMUNE RESPONSE CORPORATION (Nasdaq:IMNR) (Class Period: 5/17/99 - 706/01). The complaint alleges that during the Class Period, defendants made false and misleading statements about the efficacy of the Company's REMUNE product which was intended to stimulate an HIV-infected person's immune system to attack HIV. Defendants misstated and manipulated the results of a study performed on REMUNE which ended in May 1999 and then attempted to prevent scientists who performed the study from divulging the results to the public. As a result of the defendants' false statements, Immune Response's stock price traded at inflated levels during the Class Period, increasing to as high as $18.31 on March 6, 2000. Defendants took advantage of this inflation, completing a secondary public offering of 2.76 million shares of Immune Response stock in August 2000 for net proceeds of $14.9 million. The complaint was filed in the U.S. District Court for the Southern District of California. The lead plaintiff motion must be filed no later than September 11, 2001.
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder in any of the companies listed above and would like to be a lead plaintiff in one of these securities class actions, please contact Schiffrin & Barroway at 888-299-7706.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.