NEW YORK, Aug. 16, 2002 (PRIMEZONE) -- The law firm of Wechsler Harwood Halebian & Feffer LLP ("Wechsler Harwood") announces that a class action lawsuit was commenced on August 14, 2002 behalf of purchasers of the securities of Insight Enterprises, Inc. ("Insight" or the "Company") (Nasdaq:NSIT) between April 26, 2002 and July 17, 2002, inclusive, (the "Class Period") in the United States District Court for the District of Arizona against Insight, Eric J. Crown (Company founder and Chairman), Timothy A. Crown (Company CEO and director), and Stanley Laybourne (Company CFO, Secretary and Treasurer) (together, the "Insider Defendants").
The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. Any member of the class may move the Court to be named lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than September 27, 2002. In order to be appointed lead plaintiff, the Court must determine, among other things, that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff."
The complaint charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market during the Class Period. During the Class Period, the Individual Defendants sold 379,516 shares of Insight common stock, reaping gross proceeds in excess of $10.8 million.
According to the complaint, on April 25, 2002, after the close of the market, defendants issued Insight's First Quarter 2002 earnings press release for the three months ended March 31, 2002 and also held a conference call with analysts. The press release touted the company's accomplishments. During the conference call on April 25, 2002, defendants stated that Insight expected to see substantial growth in sales in the Second Quarter of 2002, the three months which began April 1, 2002, to between $720 million and $760 million with Second Quarter earnings growing to between $0.31 and $0.35 per share. The response from the market to defendants' statements was dramatic. The per share price of Insight common stock jumped 26% from a close of $21.30 on April 25, 2002 to a close of $26.46 on April 26, 2002.
Unbeknownst to investors, however, Insight, already one month into the Second Quarter of 2002, was suffering from known, but undisclosed adverse facts which were negatively impacting its revenues and profits and which would cause it to reverse it sequential growth pattern and report earnings per share for the Second Quarter that, at best, would be flat compared to the First Quarter reported in 2002 earnings per share and significantly below the $0.31 to $0.35 cents defendants told the market they were expecting for the Second Quarter of 2002, thereby rendering defendants statements false and misleading.
The truth regarding Insight was not fully disclosed until July 17, 2002, when defendants finally revealed that Insight anticipated Second Quarter earnings per share in the range of only $0.26 and $0.29, flat with the prior year's quarter and the First Quarter of 2002. The press release blamed the lower results on operating losses in its UK operations caused by reduced sales and a lower gross profit percentage. The press release also stated that the president and chief operating officer of the UK operations had resigned. In response to the surprise negative announcement on July 17, 2002, after the close of the market, the price of Insight common stock dropped precipitously, falling from $23.74 per share on July 17, 2001 to close at $13.36 per share on July 18, 2002, a decline of almost 44%, on volume of 12 million Insight shares.
During the Class Period, as alleged in the complaint, Insight insiders profited by selling a total of over $10.8 million in Capital One common stock at artificially inflated prices. The complaint also specifically alleges the nature of defendants access and review of information that specifcally reveled to them to sharp decline in Insight's UK business in the Second Quarter of 2002. In addition, the complaint also alleges that defendants used Insight's artificially inflated stock as "currency" in order to facilitiate the acquisition of Insight competitor Comark, Inc. in April 2002.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whhf.com) has more information about the firm. If you wish to discuss this action, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Ramon Pinon, Wechsler Harwood Shareholder Relations Department rpinoniv@whhf.com
More information on this and other class actions can be found on the Class Action newsline at www.primezone.com/ca