NEW YORK, Sept. 17, 2004 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class-action suit on behalf of all persons or entities who purchased or otherwise acquired the securities of Primus Telecommunications Group (Nasdaq:PRTL) ("PRIMUS" or the "Company") from August 5, 2003 through July 29, 2004, both dates inclusive (the "Class Period").
The action, entitled Sherman v. Primus Telecommunications, et al., Case No. 3:04-cv-674, is pending in the United States District Court for the Eastern District of Virginia and names as defendants, the Company, its Chairman, President and Chief Executive Officer, K. Paul Singh, and its Chief Operating and Financial Officer, Neil L. Hazard. 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 charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the defendants knew or recklessly disregarded the fact that the Company was operating in a new competitive reality where major incumbent carriers used long distance offerings as a "loss leader" to encourage customers to subscribe to their bundled local, cellular and broadband services; (2) that the Company's core long distance and dial-up Internet service provider products ("ISP") were experiencing significant pricing pressures; (3) that the Company's wireline long distance usage was continuing to appreciably decline due to increased use of cellular phones and Internet services; (4) that the Company was forced to accelerate investment in voice-over-Internet protocol ("VoIP") and mobile virtual network operator ("MVNO") networks; and (5) and that as a consequence of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company's growth and progress.
On July 29, 2004, after the close of the market, PRIMUS announced its results for the quarter ended June 30, 2004. The Company reported a net loss for the quarter of $15 million compared to net income of $20 million in the second quarter of 2003. News of this shocked the market. Shares of PRIMUS fell $1.70 per share, or 50.75 percent, on July 29, 2004, to close at $1.65 per share.
If you are a member of the class described above, you may, not later than October 18, 2004, move the Court to serve as lead plaintiff of the class, if you so choose. 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
Craig Lowther, Wechsler Harwood Shareholder Relations Department: clowther@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.