ATLANTA, Oct. 9, 2001 (PRIMEZONE) -- The Law Firm of Holzer & Holzer announced today that it has filed a class action lawsuit in the United States District Court for the Northern District of Georgia on behalf of purchasers of Internet Security Systems, Inc. (Nasdaq:ISSX) ("ISS" or the "Company") publicly traded securities during the period between April 1, 2001 and July 2, 2001, inclusive (the "Class Period").
The complaint charges ISS and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants made materially false and misleading representations regarding the Company's revenues and earnings for the first and second quarters of fiscal year 2001 and thereby artificially inflated the price of ISS stock. Specifically, the complaint alleges that on April 18, 2001, ISS reported its 23rd consecutive quarter of growth and, for the first quarter of 2001, ISS claimed revenues in excess of $61 million and net income of $6.5 million or $0.15 per share. According to the complaint, ISS claimed that the Company's "financial performance continued to show strength and our solid execution and focus on expense control enabled us to meet our profit guidance provided at the beginning of the quarter." ISS claimed on April 18, 2001 that its guidance for the second quarter ending June 30, 2001 was to produce revenues between $64 and $67 million and earnings in the range of $0.15 per diluted share, even though defendants knew they could not achieve these numbers. ISS claimed in its April 18, 2001 press release that "the public can continue to rely on the expectations published in its earnings release and web site as being its current expectations on matters covered, unless ISS publishes a notice stating otherwise." No such notice was given despite the fact that Defendants, who were in control of ISS during the class period, knew that their business was slowing down, the complaint alleges. The complaint further alleges that Defendants had such knowledge from financial reports, which they received on a frequent basis, as well as from their knowledge that they had too many employees in view of the economic slowdown.
The complaint also charges that in light of the fact that the Defendants knew that they had too many employees and that their business was slowing down, on July 2, 2001, after the quarter had ended, ISS issued a press release in which it stated that ISS' management expected revenues in the range of $50-52 million, as opposed to the $64-67 million predicted on April 18, 2001, and a loss per diluted share between $0.00 to $0.02, rather than earnings of $0.15 to $0.16 predicted on April 18, 2001. Just after the July 18, 2001 press conference in which ISS released its actual numbers, and admitted that it had over-hired and over-indulged on fringe benefits, travel and entertainment, ISS laid off 12% of its work force, confirming what its executives had known or recklessly disregarded throughout the Class Period, that it had too many employees and greater expenses than it could afford, given its level of sales. According to the complaint, class members who had bought ISS shares during the Class Period based upon ISS' assurance that shareholders could rely on its guidance, discovered otherwise on the morning of July 3, 2001, when the price of ISS stock tumbled more than 40 percent.
If you bought the securities of ISS between April 1, 2001 and July 2, 2001, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than November 28, 2001. In order to become a lead plaintiff, however, you must meet certain legal requirements. In the event that you have any questions concerning your rights pursuant to this litigation, you may call Holzer & Holzer toll-free at (888) 508-6832.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca