ATLANTA, Nov. 25, 2003 (PRIMEZONE) -- An investor has sued Friedman's Inc. (NYSE:FRM), accusing the jewelry retailer of misleading the public about its finances, Berman DeValerio Pease Tabacco Burt & Pucillo announced today.
The lawsuit was filed on November 21, 2003 in the U.S. District Court for the Northern District of Georgia. The plaintiff seeks damages for violations of federal securities laws on behalf of all investors who bought Friedman's common stock from January 26, 2000 through and including November 11, 2003 (the Class Period).
Berman DeValerio has represented investors in class actions for more than 20 years. To receive a copy of the complaint, you may contact the Court, call the firm at (800) 516-9926 or go to the firm's website at, www.bermanesq.com .
The lawsuit claims that the 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 false and misleading statements about Friedman's financial results and business model, causing the company's stock to reach an artificially high price.
The truth about Friedman's finances began to emerge on November 11, 2003, when the company announced that its allowance for doubtful accounts receivable from its in-store credit programs would increase to a range of 14 to 17 percent from the previously disclosed expectation of 10.5 percent. According to Friedman's, the increase was due to actual credit losses that exceeded the amounts used to establish a reserve during the Class Period. Allowance for doubtful accounts receivable is a reserve which companies like Friedman's take against sales made on credit.
As a result of the increase, Friedman's said it would be required to take a substantial charge against its earnings and possibly require a reduction in previously reported earnings.
Friedman's also announced that Victor M. Suglia, the company's chief financial officer, had been placed on a leave of absence.
As a result of the news, Friedman's common stock fell from a previous close of $12.00 per share to close at $7.31 per share on November 12, 2003, a decline of $4.69 or almost 40 percent.
The complaint names as defendants the company, Suglia and three other individuals who were top officers at Friedman's during the Class Period. The defendants were motivated to conceal Friedman's true financial state to, among other things, complete two public offerings of its common stock in February 2002 and September 2003, and to permit themselves to obtain lucrative personal loans that were forgiven when Friedman's stock reached certain prices, the lawsuit says.
If you purchased Friedman's Inc. common stock during the period of January 26, 2000 through and including November 11, 2003, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Bryan A. Wood, Esq. Michael J. Pucillo, Esq.
One Liberty Square 515 North Flagler Drive, Suite 1701
Boston, MA 02109 West Palm Beach, FL 33401
(800) 516-9926 (561) 835-9400
law@bermanesq.com lawfla@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion must be filed on your behalf with the court no later than January 13, 2004. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. You may also retain counsel of your choice. To be a member of the class, however, you need not take any action at this time.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities fraud, antitrust law violations, and consumer fraud. The firm consists of 35 attorneys in Boston, San Francisco, and West Palm Beach, Florida.
More information on this and other class actions can be found on the Class Action Newsline at, www.primezone.com/ca .