NEW YORK, July 11, 2002 (PRIMEZONE) -- A class action complaint has been filed in the United States District Court for the District of New Jersey, on behalf of all persons or entities who purchased Merck & Co., Inc. ("Merck" or the "Company") (NYSE:MRK) between July 23, 1999 through June 20, 2002, both dates inclusive (the "Class Period"). Merck, Kenneth C. Frazier, Richard C. Henriques, Raymond V. Gilmartin, Judy C. Lewent and Mary M. McDonald are named Defendants in this action.
To discuss this action, this announcement, or your rights or interests, please contact plaintiff's counsel, Eric J.Belfi or Sharon Lee, 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.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by publicly issuing a series of material misrepresentations during the Class Period, thereby artificially inflating the price of Merck securities. The Complaint alleges that, throughout the Class Period, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's increasing revenues and financial performance. As alleged in the Complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its revenues (by roughly $4.6 billion in year 2001 alone) by improperly including as revenue the value of co-payments made by consumers to their pharmacies (since the entire amount of the co-payment is paid directly to, and retained by, the pharmacy); (ii) that the financial statements prepared and filed by defendants during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP") because neither Merck nor its Medco unit ever received any revenue from the co-payments that were made to pharmacies; and (iii) that as a result, defendants' statements concerning the size of the Company's revenues and financial results were lacking in a reasonable basis at all relevant times.
On June 21, 2002, The Wall Street Journal published an article which revealed that Merck had boosted its reported revenues by billions of dollars (by roughly $4.6 billion in year 2001 alone) by improperly including as revenue the value of co-payments made by consumers with a prescription-drug card to their pharmacy to cover their portion of the cost of a prescription under an insurance plan.
Following this report, shares of Merck fell $2.22 per share to close at $49.98 per share, after reaching a Class Period high of $94.875 on November 29, 2000, on volume of more than 15.2 million shares traded, or more than twice the average daily volume.
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 LLP at www.rabinlaw.com.
If you purchased Merck during the Class Period described above, you may, no later than August 30, 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. Contact plaintiffs' counsel Eric J. Belfi or Sharon Lee of Rabin & Peckel LLP to further discuss this action, this announcement, or your rights or interests.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.