Bala Cynwyd, PA , July 9, 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 Northern District of California on behalf of all purchasers of the common stock of Read-Rite Corporation ("Read-Rite" or the "Company") (Nasdaq:RDRT) (Pink Sheets:RDRTQ) from October 30, 2001 through June 6, 2003, 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 October 30, 2001 and June 6, 2003, thereby artificially inflating the price of Read-Rite common stock. Read-Rite is one of the three major independent suppliers of magnetic recording heads for the hard disk drive ("HDD") and tape drive markets. The Company also designs, manufactures and markets magnetic recording heads as head gimbal assemblies ("HGAs") and incorporate multiple head gimbal assemblies into head stack assemblies ("HSAs").
Throughout the Class Period, and as alleged in the Complaint, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's financial performance. These statements contained in the Company's press releases and SEC filings were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (a) that the Company's financial results were in violation of generally accepted accounting principles ("GAAP"). More specifically, the Company's GAAP violations were: (1) the Company's 40 GB/platter inventory was overstated by $16.7 million; (2) the Company's Philippine real estate holdings were overstated by roughly $6.8 million; and (3) the Company's second quarter fiscal year 2002 loss was grossly understated; (b) that the Company needed to restructure the Company's operations and the associated charges would cost the Company in excess of $20 million causing earnings shortfalls in future quarters; (c) that the Company was experiencing massive technical problems associated with the Company's 40GB/per platter programs. Morever, the Company was experiencing these problems well before January 2002 and beyond April 2002 when defendants claimed such problems were fixed; (d) that the Company was underfunded and could not complete the production of its 80GB programs; (e) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (f) that the Company's estimates, projections, and opinions were lacking in any reasonable basis when made. After the close of the Class Period, the Company announced, on June 17, 2003, that it would file for bankruptcy.
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 September 5, 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