PHILADELPHIA, Feb. 19, 2002 (PRIMEZONE) -- Berger & Montague, P.C., www.bergermontague.com, filed a class action against Enterasys Networks, Inc. (NYSE:ETS) and certain of the officers and directors in the United States District Court for the District of New Hampshire, on behalf of all persons or entities who purchased Enterasys Networks, Inc. common stock during the period from September 26, 2001 through February 1, 2002.
The complaint charges Enterasys and certain of its officers and directors with violations of Sections 10(b) and 20 of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The complaint alleges that Defendants issued public statements and releases and filed documents with the SEC reporting financial results and revenues for Enterasys without disclosing that revenues were materially overstated as a result of the improper recognition of revenue in Enterasys' Asia-Pacific region in violation of ("Generally Accepted Accounting Principles") GAAP and Enterasys' own revenue recognition policies. It was not until the close of trading on February 1, 2002 that Enterasys disclosed that the release of its fourth quarter and fiscal year ended December 29, 2001 financial results would be delayed in order to complete a review of a $4 million sales contract recorded by its Asia-Pacific operations which did not comply with the Company policies or Generally Accepted Accounting Principles ("GAAP"). Enterasys' auditor KPMG, LLP ("KPMG") had reviewed the same contract, but the one KPMG reviewed had different terms and conditions which purportedly complied with Enterasys' policies and GAAP. As a result, Enterasys hired the Boston firm of Ropes & Gray and the accounting firm of Deloitte & Touche, LLP to review revenue recognition and sales practices in the Asia Pacific region. Three out of 120 employees in the Asia-Pacific region have been put on leave as a result. In addition, Enterasys has received an order of investigation from the SEC, purportedly relating to Enterasys and certain affiliated companies. Moreover, preliminary unaudited results in Latin America were $7 million below internal expectations. Following the February 1, 2002 announcement, Enterasys shares fell $6.59 to $4.21 in trading of 35.1 million shares or 22 times the 3 month daily average, sinking to the lowest closing price since May, 1991. Enterasys stock suffered the second largest percentage decline in U.S. markets, reducing Enterasys' market value to $855.4 million from $2.9 billion.
Plaintiff seeks to recover damages on behalf of all purchasers of Enterasys Networks, Inc. common stock during the Class Period (the "Class"). The plaintiff is represented by Berger & Montague, P.C. which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
The law firm of Berger & Montague, P.C. has 55 attorneys, all of whom represent plaintiffs in complex litigation. The Berger firm has extensive experience representing plaintiffs in class action securities litigation and has played lead roles in major cases over the past 25 years which have resulted in recoveries of several billion dollars to investors. The firm has represented investors as lead counsel in actions against Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken and IKON Office Solutions, Inc. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:
"Class counsel did a remarkable job in representing the class interests." In re: IKON Office Solutions Securities Litigation, Civil Action No. 98-4286 (E.D.Pa) (partial settlement for $111 million approved May, 2000).
"...(Y)ou have acted the way lawyers at their best ought to act. And I have had a lot of cases...in 15 years now as a judge and I cannot recall a significant case where I felt people were better represented than they are here...I would say this has been the best representation that I have seen." In Re: Waste Management, Inc. Securities Litigation, Civil Action No. 97-C 77-9 (N.D.Ill.) (settled in 1999 for $220 million).
If you purchased Enterasys Networks, Inc. common stock during the period from September 26, 2001 through February 1, 2002, inclusive, you may, no later than April 8, 2002, move to be appointed 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 plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as lead plaintiff.
If you purchased Enterasys Networks, Inc. common stock, or have any questions concerning this notice or your rights with respect to this matter, you may contact:
Sherrie S. Savett, Esquire Barbara A. Podell, Esquire Kimberly A. Walker, Investor Relations Manager Berger & Montague, P.C. 1622 Locust Street Philadelphia, PA 19103 Telephone: (888) 891-2289 or (215) 875-3000 Fax: (215) 875-5715 Website: www.bergermontague.com e-mail: InvestorProtect@bm.net
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca