BALA CYNWYD, Pa., March 13, 2002 (PRIMEZONE) -- A shareholder sued Enterasys Networks, Inc. ("Enterasys" or the "Company") (NYSE:ETS) claiming that the company misled investors about violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, as alleged in a complaint filed by the law firm of Schiffrin & Barroway, LLP.
The complaint was filed in the U.S. District Court for the District of New Hampshire and seeks damages for violations of federal securities laws on behalf of all investors who bought Enterasys Networks, Inc. securities between September 26, 2001 and February 1, 2002 (the "Class Period").
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 of Enterasys Networks, Inc. and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our Website at www.sbclasslaw.com.
The complaint alleges that the New Hampshire-based Enterasys Networks, Inc. issued a series of material misrepresentations to the market between September 26, 2001 and February 1, 2002, thereby artificially inflating the price of Enterasys securities. Throughout the Class Period, as alleged in the complaint, defendants issued statements regarding Enterasys' quarterly financial performance and filed reports confirming such performance with the United States Securities and Exchange Commission ("SEC"). The complaint alleges that these statements were materially false and misleading because, among other things, (i) the Company's Asia Pacific region operations, which represented a material portion of the Company's revenues, was improperly recognizing revenues in violation of the Company's accounting policies and Generally Accepted Accounting Principles. As a result, Enterasys' operating results were materially misrepresented and overstated; (ii) Enterasys lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) based on the foregoing, defendants' statements concerning the prospects of Enterasys were lacking in a reasonable basis at all times.
On February 1, 2002, after the close of the market, Enterasys shocked the market when it announced that it would be delaying the release of its fourth quarter and fiscal year financial results because it was reviewing the revenue recognition practices of its Asia Pacific operations. The Company also announced that it was being investigated by the SEC. In response to these disclosures, on February 4, 2002, the first day of trading following the Company's announcement, shares of Enterasys closed at $4.20 per share, a loss of more than 61% since its previous close of $10.80 on February 1, 2002, on volume of more than 35 million shares traded.
If you purchased Enterasys Networks, Inc. securities between September 26, 2001 and February 1, 2002, you may be a member of the class and have until April 8, 2002 to move the court to become a lead plaintiff. To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our Website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca