LITTLE ROCK, Ark., Sept. 26, 2002 (PRIMEZONE) -- The deadline for purchasers of Martha Stewart Living Omnimedia, Inc. ("MSLO" or the "Company") (NYSE:MSO) publicly traded securities to move for lead plaintiff in a securities fraud class action recently brought against the Company is rapidly approaching. If you purchased MSLO securities between January 8, 2002 and July 24, 2002, inclusive (the "Class Period"), and you wish to be a lead plaintiff in the case, you must move to serve as lead plaintiff by filing a motion in the United States District Court for the Southern District of New York by October 7, 2002. A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.cauleygeller.com/pr/martha_stewart.pdf.
Cauley Geller has discovered that a Merrill Lynch & Co. brokerage assistant at the center of an alleged insider-trading scandal involving decorating expert Martha Stewart may be close to a deal with prosecutors investigating Stewart and others in the ImClone trading scandal. The brokerage assistant, Douglas Faneuil, was an assistant to Stewart's broker at Merrill Lynch, Peter Bacanovic, when Stewart sold her ImClone shares, and is seen as a key figure in a Department of Justice probe into the controversial stock sale. The probe gives credence to Cauley Geller's lawsuit, filed last month.
The complaint charges that defendants MSLO, Martha Stewart ("Stewart," founder, Chairman and CEO), Sharon L. Patrick (President, Chief Operating Officer and director), Dora Braschi Cardinal (Executive Vice President - Print Production), Gael Towey (Executive Vice President and Creative Director), Gregory R. Blatt (Executive Vice President - Business Affairs, Secretary and General Counsel), Lauren Podlach Stanich (Executive Vice President, President, Publishing) Margaret Roach (Executive Vice President, Editor-in-Chief), Suzanne Sobel (Executive Vice President-Advertising Sales), John L. Doerr (director from 7/99 through early 2002), and venture capital firm Kleiner Perkins Caufield & Byers 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 materially false and misleading statements to the market between January 8, 2002 and July 24, 2002. Among other things, the complaint alleges that Stewart sold 100% of her personally held common stock of ImClone, Inc. ("ImClone") based on insider information obtained from Samuel Waksal ("Waksal"), ImClone's CEO and a personal friend of Stewart's. The complaint further alleges that the insider information allowed Stewart to sell all of her 4,000 shares of ImClone common stock on December 27, 2001, one day before devastatingly negative news regarding ImClone was publicly disclosed for the first time, sending the price of ImClone common stock plummeting. On January 18, 2002, the complaint charges, the Securities and Exchange Commission, Justice Department and U.S. House Energy and Commerce Committee began investigating whether Waksal had warned certain of his relatives and friends of the negative developments prior to the public disclosure of such developments, allowing them to avoid the massive losses resulting from the subsequent public disclosure. According to the complaint, despite knowing of her illicit insider-sales and the foreseeability that the government's investigations would uncover her wrongdoing and have a materially adverse impact on MSLO's business (which depended in large part on Stewart's reputation and public image), Stewart failed to disclose her activities to the public. Instead, the complaint alleges, Stewart, along with the other defendants, sold a total of $79 million in MSLO common stock, with many defendants selling nearly all of their MSLO common stock. As alleged in the complaint, the public first learned of Stewart's complicity in the high-profile ImClone scandal on June 6, 2002, with the publication of a media report -- setting-off a precipitous decline in MSLO's stock price. The impact of Stewart's involvement in the ImClone scandal on MSLO's business was, according to the complaint, not known to the public until July 24, 2002, when the Company announced that the circumstances were negatively impacting its revenues and earnings, causing MSLO to slash earnings estimates for the third quarter of 2002 by half and reducing guidance for the entire year 2002. On July 24, the price of MSLO common stock dropped to below $7.50 per share -- a 60% drop in one month, and were as low as $7.08 in early trading Thursday.
If you bought MSLO publicly traded securities between January 8, 2002 and July 24, 2002, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than October 7, 2002. If you are a member of this class, you can join this class action online at http://www.cauleygeller.com/sign_up.html. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock, and San Diego.
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 or visit the Firm's website at www.cauleygeller.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca