BALA CYNWYD, Pa., June 6, 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 Middle District of Florida, Orlando Division on behalf of all purchasers of the common stock of Recoton Corporation ("Recoton" or the "Company") (Nasdaq:RCOTQ) from November 15, 1999 through August 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.
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 November 15, 1999 and August 19, 2002, thereby artificially inflating the price of Recoton securities. During the Class Period, the Company issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that a "strategic plan," which was required by its creditors, was not implemented to improve efficiencies, increase future profitability, improve cash flow, and increase return on assets; (2) that there was never a plan to develop a more incentive-based method of compensation; (3) that the Company's reported financial results were in violation of generally accepted accounting principles ("GAAP") because, inter alia, (a) the company improperly recognized and overstated revenue; and (b) the Company failed to properly reflect inventory on its balance sheets at the lower of cost or market value; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times.
On May 8, 2002, the investing public learned via a Company press release that no strategic plan had been implemented to improve operating efficiencies, increase future profitability, improve cash flow and increase return on assets. Additionally, on August 19, 2002, the Company revealed information showing that, contrary to its earlier statements on awarding only incentive-based compensation to management, bonuses had been paid to executives in advance of the Company's achievement of certain goals. The Company also revealed that it had granted additional price concessions to customers "on products previously purchased." On news of the this, shares of Recoton stock fell 15% to close at $1.76 per share, down more than 91% from its previous Class Period high of $20.50.
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/currentcases.cfm.
If you are a member of the class described above, you may, not later than July 29, 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