NEW YORK, July 21, 2003 (PRIMEZONE) -- The law firm of Kirby McInerney & Squire, LLP announces that a class action lawsuit has been commenced in the United States District Court for the Southern District of Florida on behalf of all purchasers of Singing Machine Medical Group, Inc. ("Singing Machine" or the "Company") (AMEX:SMD) common stock during the period from February 14, 2001 through July 14, 2003, inclusive (the "Class Period").
Please visit our website, which offers summary and detailed information concerning the suit at http://www.kmslaw.com/new_cases/SingingMachine/SingingMachine.htm or contact us by phone at (888) 529-4787 or by email at emui@kmslaw.com for more information.
The action charges Singing Machine and certain of its senior officers with violations of Sections 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The alleged violations stem from the dissemination of false and misleading statements, which had the effect -- during the Class Period -- of artificially inflating the price of Singing Machine's shares.
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 August 9, 2001 and June 27, 2003, thereby artificially inflating the price of The Singing Machine common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income in violation of Generally Accepted Accounting Principles ("GAAP"); (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times; (4) that the Company avoided taking sufficient changes to earnings in 2001 and 2002 to account for income tax liabilities; and (5) that as a result, the Company's financial results were materially overstated at all relevant times.
On June 27, 2003, the Company announced that it would restate its fiscal 2002 financial statements and possibly fiscal 2001 financial statements to increase the accrual for income taxes. Moreover, the Company stated that the restatement will have the effect of reducing net income for fiscal 2002 and possibly fiscal 2001. News of The Singing Machine's restatement shocked the market. Shares of The Singing Machine fell 33%, or $1.80 per share, to close at $3.60 per share on June 27, 2003. On July 14, 2003, the Company announced further details about its restatement and also announced that "its auditors have expressed substantial doubt about Singing Machine's ability to continue as a going concern." News of this again shocked the market, and shares of the Singing Machine fell 19% percent to close at $3.03 per share on July 15, 2003.
Kirby McInerney & Squire, LLP has specialized in complex litigation, including securities class actions, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's website at http://www.kmslaw.com.
If you are a member of the class described above, you may, no later than September 2, 2003, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. 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 seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, you can contact:
Ira M. Press, Esq. Elaine Mui KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue, 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail: emui@kmslaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca