BALA CYNWYD, Pa., March 17, 2003 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Eastern District of New York on behalf of all purchasers of the common stock of Acclaim Entertainment, Inc. ("Acclaim" or the "Company") (Nasdaq:AKLM), from January 11, 2002 through September 19, 2002, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
Throughout the Class Period, as alleged in the complaint, defendants issued numerous statements which described the Company's increasing income and improving 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 was engaging in aggressive sales practices, known as channel stuffing, whereby it induced customers to take product that they neither wanted, needed or could sell in the short-term; (ii) that the Company was currently experiencing severe and continued operating problems at the Company's internal studios regarding the development, content, cost, market testing, distribution and sales of the Company's products; (iii) that the Company was currently experiencing decreased demand for the Company's products, including Turoc: Evolution and Aggressive In-Line, among others, resulting in the Company's inability to meet revenue and earnings guidance provided by defendants for fiscal 2002 and beyond; (iv) that the Company's distribution and retails sales tracking information systems were inadequate, causing the Company to materially underestimate the Company's allowances for sales returns and price concessions; (v) that the Company's development of computer games with mature themes, including BMX XXX, among others, had materially impeded the Company's ability to access broad-based retail channels for the Company's products, thus impeding the Company's ability to meet revenue and earnings forecasts; and (iv) based on the foregoing, defendants' opinions, projections and forecasts concerning the Company and its operations were lacking in a reasonable basis at all times.
The Class Period ends on September 19, 2002, when Acclaim shocked the market by issuing a press release announcing that the Company now expected to report an operating loss for the 4th quarter of 2002, primarily because of sharply lower revenues that fell below defendants' guidance by 25%, among other reasons. In addition, the Company lowered its guidance for the first and second quarters of its 2003 fiscal year, as well as for the 2003 fiscal year.
Market reaction to defendants' belated disclosures was swift and severe. Upon hearing the news, the market for Acclaim common shares collapsed, losing over 29% of their value in a single day's trading to close at $1.56 per share on September 19, 2002 and losing over 73% of their value when compared to the Class Period high of $5.85 per share reached on April 19, 2002.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than May 13, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca