WEST PALM BEACH, Fla., May 3, 2004 (PRIMEZONE) -- An investor sued Spear & Jackson, Inc. (OTCBB:SJCK) today, claiming the toolmaker and two of its top officers released misleading financial information to the public.
Berman DeValerio Pease Tabacco Burt & Pucillo (www.bermanesq.com) filed the class action in the U.S. District Court for the Southern District of Florida. The lawsuit seeks damages for violations of federal securities laws on behalf of all investors who bought the publicly traded securities of Megapro Tools, Inc. (formerly traded on OTCBB as MPOT) or Spear & Jackson, Inc. (SJCK), from January 30, 2002, through and including April 15, 2004 (the Class Period). Megapro and Spear & Jackson merged in September 2002.
Berman DeValerio has represented investors in class actions since 1982. To receive a copy of the complaint, you may contact the court, call the firm at (800) 349-4612 or go to http://www.bermanesq.com/pdf/SpearJack-Cplt.pdf. The complaint, Rodriguez v. Spear & Jackson, Inc., et. al., is filed as Civil Action No. 04-80419-Civ-Cohn.
The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission (SEC) Rule 10b-5.
The complaint names as defendants: Spear & Jackson, Inc.; Dennis Crowley, who was Spear & Jackson's chairman and chief executive officer; and William Fletcher, who was Spear & Jackson's chief financial officer.
According to the complaint, Spear & Jackson issued materially false and misleading information to the investing public during the Class Period that artificially inflated the company's stock price. Specifically, the lawsuit says that the defendants knew but concealed from the investing public that:
(a) starting in February 2002, Crowley had orchestrated a "pump-and-dump" scheme to manipulate the share price of Megapro and Spear & Jackson stock in which Crowley used false information to tout Spear & Jackson stock to registered representatives and broker-dealers around the country;
(b) Crowley used offshore companies he controlled to illegally obtain more than 1.2 million shares of Megapro and Spear & Jackson stock during 2002;
(c) while Crowley was using false information to inflate the share price of Megapro and Spear & Jackson stock, he sold almost 650,000 of these illegally obtained shares - realizing more than $3 million in profits; and
(d) the company's announced earnings projections for fiscal 2004, of $0.50 to $0.55 per share, were unrealistic.
On April 16, 2004, the U.S. Securities Exchange Commission announced it had filed a complaint and obtained a temporary restraining order and other emergency relief against Spear & Jackson and Dennis Crowley. At the SEC's request, a federal court also issued an order temporarily barring Crowley from serving as an officer or director of any public company and appointed a corporate monitor to oversee Spear & Jackson's affairs.
On this news, Spear & Jackson shares fell by as much as $0.52 to trade at $1.85, a decline of 88 percent from the Class Period high.
If you purchased Megapro Tools, Inc. or Spear & Jackson, Inc. common stock, from January 30, 2002, through and including April 15, 2004, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Michael J. Pucillo, Esq.
Jay W. Eng, Esq.
Northbridge Centre, Suite 1701
515 North Flagler Drive
West Palm Beach, FL 33401
(800) 349-4612
lawfla@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion on your behalf must be filed with the court no later than June 21, 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, or you may submit information online at http://www.bermanesq.com/Securities/Signup1.asp?caseid=508. Please note, you may also retain counsel of your choice and need not take any action at this time to be a class member.
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 33 attorneys in Boston, San Francisco and West Palm Beach, Florida.