NEW YORK, Nov. 6, 2002 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action lawsuit in the United States District Court for the Northern District of Illinois (Eastern Division) against Sears Roebuck & Co. ("Sears" or the "Company") (NYSE:S) and five of the Company's senior officers on behalf of all persons or entities who purchased or otherwise acquired the securities of Sears during the period between January 17, 2002 and October 17, 2002 (the "Class Period"). The lawsuit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading statements concerning the Company's business and financial condition, all of which served to artificially inflate the Company's stock price.
The Complaint alleges that, throughout the Class Period, defendants represented that Sears, one of North America's largest retailers, was growing strongly and that it would achieve earnings growth of 22% in 2002, as compared to 2001. In addition, in each of its press releases and financial reports, Sears reported its provisions for uncollectible accounts and, in its 2001 annual report, represented that such reserves were "adequate." These statements were materially false and misleading because they failed to disclose that the Company's risk of customer defaults on Sears credit card bills had risen dramatically throughout the Class Period and that the Company was under-reserved for this risk by (at the very least) hundreds of millions of dollars, thereby inflating its assets and earnings.
On October 17, 2002, Sears reported in a press release that it will grow its 2002 earnings by 15%, rather than the 22% it reaffirmed ten days previously, because of a "$222 million increase in the domestic provision for uncollectible accounts." In addition, earnings for the third quarter were 26% less than the previous year and operating income for Sears Credit was "down 28% compared to the prior year." In reaction to the press release, the price of Sears common stock plummeted, falling 32%, from an October 16 close of $33.95 per share to close at $23.15 per share on October 17, on trading of an astounding 36 million shares, which was 12 times the Company's daily trading average of 2.9 million shares during the Class Period.
If you purchased the securities of Sears during the Class Period, you have until December 17, 2002 to ask the Court to appoint you as lead plaintiff for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, or if you would like to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz firm, which has offices in New York and Chicago, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca