BALA CYNWYD, Pa., June 5, 2002 (PRIMEZONE) -- A shareholder sued Specialty Laboratories, Inc. ("Specialty Labs") (NYSE:SP) claiming that the company misled investors about its business and financial condition, 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 Central District of California and seeks damages for violations of federal securities laws on behalf of all investors who bought Specialty Laboratories, Inc. securities pursuant to the Company's Registration Statement AND/OR between 12/08/00 and 04/10/02, (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 Specialty Laboratories, Inc. and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our website at http://www.sbclasslaw.com/cgi/signup.cgi.
The complaint alleges that the California-based Specialty Laboratories, Inc. , a research-based clinical laboratory, develops and performs esoteric clinical laboratory tests. The Company went public in 12/00 selling five million shares at $16.00 per share. Specifically, the complaint alleges that in June and October of 2001, the California Department of Health Services representing the State of California and acting as agent of the Centers for Medicare and Medical Services ("CMS"), inspected Specialty Labs. The inspectors were mortified by their findings. As a result of the inspections, Specialty Labs was initially cited by the State of California with 20 deficiencies, and then in a separate statement in February 2002 for 12 overlapping deficiencies by CMS. Specialty Labs was notified that if it failed to correct 6 of the issues, relating primarily to personnel licensing and the enforcement of regulatory requirements, the Company would face monetary and other penalties, including the possible revocation of its license. Specialty Labs' deficiencies in question relate to two broad areas, both of which focus on the number of licensed personnel in the lab. First, historically there have been required ratios for labs in terms of the number of licensed supervisors per the number of testing personnel. Second, California implemented a requirement for labs performing testing in the areas of cytogenetics and molecular genetics. Specifically, directors of such operations must now be at least at the M.D. or Ph.D. level and must also be Board certified in their area of focus. However, defendants sought to avoid compliance with California's laboratory requirements in order to inflate the Company's revenue and EPS.
On April 11, 2002, before the market opened, the Company issued a press release which provided a more comprehensive explanation and discussion of the compliance problems. On this news, the Company's shares plunged to an all time low of $10-1/4, more than an 80% drop from the Class Period high.
If you purchased Specialty Laboratories, Inc. securities between pursuant to the Company's Registration Statement AND/OR between 12/08/00 and 04/10/02, you may be a member of the class and have until July 6, 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 http://www.primezone.com/ca