HOUSTON, June 27, 2002 (PRIMEZONE) -- The Emerson Firm, a class action securities trial law firm with offices in Houston, Texas and Little Rock, Arkansas, announced today that a class action has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of Omnicom Group, Inc. ("Omnicom" or the "Company") (NYSE:OMC) publicly traded securities during the period between April 25, 2000 and June 11, 2002, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be obtained from the Firm.
The Complaint alleges that defendants Omnicom, John D. Wren, Randall J. Weisenburger, Bruce Crawford and Philip J. Angelastro violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 25, 2000 and June 11, 2002, thereby artificially inflating the price of Omnicom securities. The complaint alleges that prior to and throughout the Class Period, defendants reported that Omnicom was continuing to experience growth in its revenues and earnings, despite the overall economic slowdown and the worst decline in advertising revenue that the industry had ever experienced. As alleged in the complaint, Omnicom's growth was attributed, for the most part, to the numerous acquisitions made by the Company, which were accretive to the Company's earnings. However, on June 12, 2002, an article in The Wall Street Journal highlighted the Company's acquisition accounting and raised questions concerning the Company's creation of an off-balance sheet entity in which it transferred certain Internet investments. In particular, with respect to the Company's accounting for acquisitions, the article noted that: (i) Omnicom immediately included revenue and earnings from recent acquisitions in its reported financial results, in contrast to its competitors who excluded the results for the first year after the company was acquired, thereby creating a materially misleading impression of the Company's performance; (ii) that the Company continued to owe hundreds of millions of dollars in additional payments for companies that it had previously acquired; and (iii) the Company faced a potential future liability whereby, under certain circumstances, it might be required to acquire companies in which it had invested. With respect to the off-balance sheet entity, the article described the Company's transfer of its Internet investments to Seneca, which had been jointly created with Pegasus Capital LLP in May 2001. According to the article, Seneca had been created as a vehicle for the Company to avoid reporting a loss on its investments in Internet companies that had become devalued.
In response to the revelations contained in The Wall Street Journal article, the price of Omnicom common stock dropped precipitously, falling almost 20% to close at $62.28, on volume of more than 31 million shares traded.
If you bought Omnicom publicly traded securities between April 25, 2000 and June 11, 2002, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than August 12, 2002. If you are a member of this class, you can join this class by contacting Ms. Tanya Autry in the Shareholder Relations Department of The Emerson Firm. Any member of the purported class may move the Court to serve as lead plaintiff through The Emerson Firm or other counsel of their choice.
The Emerson Firm has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Texas and Arkansas, but represents investors throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm.
The Emerson Firm Investor Relations Department: Tanya R. Autry P.O. Box 25336 Little Rock, AR 72221 Toll Free: 1-800-663-9817 E-mail: tanya.autry@worldnet.att.net
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.