NEW YORK, Feb. 21, 2002 (PRIMEZONE) -- A class action complaint has been filed in the United States District Court for the Central District of California, civil action number 02 Civ. 01427, on behalf of all persons or entities who purchased Homestore.com, Inc. ("Homestore" or the "Company") common stock (Nasdaq:HOMS) between May 4, 2000 and December 21, 2001, both dates inclusive (the "Class Period").
The complaint charges Homestore and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Homestore provides an online marketplace for home and real estate-related information, products and services. On July 19, 2000 (after the close of the market), Homestore issued a release of its positive second quarter 2000 results, causing Homestore's stock price to soar by more than $7 (or 25%) the following trading day. The complaint alleges that as part of their effort to boost the price of Homestore stock, defendants misrepresented Homestore's true prospects in an effort to conceal Homestore's improper acts until they were able to sell at least $16 million of their own Homestore stock. In order to overstate revenues and assets in the second, third, and fourth quarters of 2000, and the first, second, and third quarters of 2001, Homestore violated Generally Accepted Accounting Principles and SEC rules by engaging in improper "roundtrip" transactions. These transactions had the effect of dramatically overstating revenues and assets. This came to an end (though unbeknownst to the public) in the Company's third quarter of 2001 as the Company's main roundtrip partner stopped doing these transactions with the Company.
Following the release of the Company's third quarter 2001 results, the Company also slashed its revenue projections for 2002 from $563 million to $375-$425 million as a result of a material decline in its business with its main "roundtrip" partner. On this news the Company's shares plummeted by more than 50% the following trading day. Then, on December 21, 2001 (after the close of the market), the Company partially admitted that its past accounting for its prior results was inaccurate. On this news the Company's shares were halted and have not traded since.
Plaintiff is represented by the law firm of Rabin & Peckel LLP. Rabin & Peckel LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States. You can learn more information about Rabin & Peckel at www.rabinlaw.com.
If you purchased Homestore common stock during the Class Period described above, you may, no later than February 25, 2002, move the Court to serve as lead plaintiff. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this action as a lead plaintiff online at www.rabinlaw.com. If you wish to discuss this action further or have any questions concerning this announcement, or your rights or interests, please contact plaintiff's counsel, Eric Belfi or Maurice Pesso, Rabin & Peckel LLP, 275 Madison Avenue, New York, NY 10016, by telephone at (800) 497-8076 or (212) 682-1818, by facsimile at (212) 682-1892, or by e-mail at email@rabinlaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca