BALA CYNWYD, PA, June 27, 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 North Carolina on behalf of all purchasers of the common stock of Laboratory Corporation Of America Holdings ("LabCorp" or the "Company") (NYSE:LH) from February 13, 2002 through October 3, 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 charges 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 materially false and misleading statements to the market between February 13, 2002 to October 3, 2002. The Complaint alleges that by the start of the Class Period LabCorp was being adversely impacted by a host of undisclosed negative trends, which were causing the Company to experience declining revenues and earnings. In particular the Complaint alleges that LabCorp failed to disclose and/or misrepresented the following adverse facts, among others: (1) that LabCorp was currently experiencing a material decline in growth rates for routine/core testing volumes; (2) that LabCorp's marketing and relationship management staff were inadequate and could not effectively compete with local and regional clinical laboratory services; (3) that the service levels, including price, turnaround time and quality of service, of the Company's remote testing facilities including the Company's STAT laboratories and patient care facilities, among others, were inadequate and could not effectively compete with local and regional clinical laboratory services; (4) that the types of clinical laboratory services available through the Company's remote testing facilities were limited and could not effectively compete with local and regional clinical laboratory services; and (5) based on the foregoing, defendants' opinions, projections and forecasts concerning the Company and its operations were lacking in a reasonable basis at all times.
Rather than disclose the truth about the Company's weakening condition and jeopardize its ability to complete acquisitions, defendants issued a series of materially false and misleading statements to the market in order to inflate the price of LabCorp common stock and enable the Company to use its stock as currency for a material acquisition. In addition, prior to the disclosure of the true facts about the Company, LabCorp insiders sold more than $29 million of their personally held LabCorp common stock to the unsuspecting public.
The truth about LabCorp was partially revealed, when on October 3, 2002, defendants announced that LabCorp failed to meet revenue and earnings guidance for the third quarter ended September 30, 2002, as well as the remainder of 2002, due to a revenue shortfall, primarily, in the South and Southeast regions of the U.S. stemming from a material loss of routine/core testing volumes among independent physicians. Subsequently, on October 4, 2002, defendant MacMahon admitted that defendants were aware that the Company was losing sales to local and regional labs and had attempted, unsuccessfully, to "remedy the problem" as early as May 2002. Following these announcements, the price of LabCorp common stock collapsed, losing over 34% of their value in one day of trading to close at $21.68 per share on October 4, 2002, and falling over 58% from the Class Period high of $51.98 per share reached on or about May 10, 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 August 25, 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