NEW YORK, March 4, 2004 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class action on behalf of persons or entities who purchased or otherwise acquired the securities of AaiPharma, Inc. (Nasdaq:AAII) ("AaiPharma" or the "Company") from April 24, 2002 through and including March 1, 2004 (the "Class Period").
The action, entitled Miller v. AaiPharma, Inc., et al., Case No. not yet assigned, is pending in the United States District Court for the Eastern District of North Carolina and names as defendants, the company, its Chairman and Chief Scientific Officer, Frederick D. Sancilio, its Chief Financial Officer and Executive Vice President, William L. Gina, Jr., and its Chief Executive Officer and President, Philip S. Tabbiner. A copy of the complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.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. Specifically, the complaint alleges throughout the Class Period, defendants issued quarter after quarter of "record" financial results. Defendants emphasized increased revenues throughout the Class Period, fueled by strong sales of pharmaceutical products. The complaint alleges that Defendants failed to disclose that these stellar financial results were only made possible through improper sales practices, such as "channel stuffing" or flooding wholesalers with products in order to artificially boost sales, and failing to properly reserve for product returns in violation of Generally Accepted Accounting Principles ("GAAP").
On February 5, 2004, before the market opened, defendants announced that fourth quarter net revenues were reduced by $15.9 million. In response to the news concerning AaiPharma's previously undisclosed inventory issues, the price of AaiPharma stock dropped from over $27 per share on February 4, 2004 to $21.30 on February 5, 2004, a drop of over 23% on unusually large trading volumes of 4.8 million shares traded. The stock continued to drop as the fraudulent nature of the Company's sales and accounting practices came to light, trading at only $20 per share on February 9, 2004. On March 1, the Company confirmed investors' worst fears by announcing that it is investigating "sales abnormalities" in key product lines, that "will materially affect" its outlook for the first quarter and full-year 2004 and that it was withdrawing earnings estimates for those periods. On this news, AaiPharma shares again plunged another $5.51, or 36%, to $9.77.
If you purchased or otherwise acquired AaiPharma securities during the Class Period, you may request that the Court appoint you as lead plaintiff by April 13, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. 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 serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 David Leifer, Wechsler Harwood Shareholder Relations Department: dleifer@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com