NEW YORK, Nov. 7, 2002 (PRIMEZONE) -- The law firm of Wechsler Harwood LLP ("Wechsler Harwood") announces that a class action lawsuit was filed on November 6, 2002, on behalf of purchasers of the securities of Broadwing, Inc. ("Broadwing" or the "Company") (NYSE:BRW) between January 17, 2001 and May 20, 2002, inclusive. A copy of the complaint filed in this action is available from the Court, or can be viewed on Wechsler Harwood website at: http://www.whesq.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 issuing a series of material misrepresentations to the market between January 17, 2001 and May 20, 2002 thereby artificially inflating the price of Broadwing securities. As alleged in the complaint, Broadwing, together with its consolidated subsidiaries, purported to be a full-service, local and national provider of data and voice communications services. Throughout the Class Period, as alleged in the complaint, defendants represented to investors that Broadwing's business was strong; that it had unique attributes that set it apart from its competitors in the industry and that immunized it from the adverse effects of the industry-wide downturn and related "bandwidth glut"; that the Company was successfully achieving strong financial results and executing on its business plan; and that the Company's goodwill asset was reasonably valued at $2.2 billion.
As alleged in the complaint, these statements were materially false and misleading because they failed to disclose, among other things, that: (a) the Company was not increasing its revenue by winning over new customers with unique and superior service offerings but rather through the use of one-time transactions with other carriers and sham swap transactions that had no economic substance; (b) Broadwing's broadband revenue flow was extraordinarily unreliable because it was derived in large part from its competitors who were themselves vulnerable to the telecommunications industry downturn; and (c) the Company's reported goodwill and shareholder equity were grossly over-valued.
On May 20, 2002, the truth emerged that a material portion of Broadwing's revenue was derived from one-transactions with its competitors. Broadwing's share price plummeted 30% on these reports and related concerns about the quality of Broadwing's revenue reporting and liquidity, to close at $3.70 down $1.58 from the previous days closing price of $5.28.
If you bought the securities of Broadwing between January 17, 2001 and May 20, 2002, you may, no later than December 30, 2002, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine 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." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Ramon Pinon, Wechsler Harwood, Shareholder Relations Department: rpinon@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca