BOSTON, Oct. 1, 2004 (PRIMEZONE) -- An investor sued Stonepath Group, Inc. ("Stonepath" or the "Company") (AMEX:STG) today, claiming the Company misled the investing public about its financial results.
Berman DeValerio Pease Tabacco Burt & Pucillo (www.bermanesq.com) filed the class action in the U.S. District Court for the Eastern District of Pennsylvania. The lawsuit seeks damages for violations of federal securities laws on behalf of all investors who bought Stonepath common stock from May 7, 2003 through and including September 20, 2004 (the "Class Period").
To receive a copy of the complaint, you may contact the court, call the firm at (800) 516-9926 or go to http://www.bermanesq.com/pdf/Stonepath-Cplt.pdf.
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: Stonepath; Dennis L. Pelino, who was at all relevant times the Company's chairman and chief executive officer; Bohn H. Crain, who was at all relevant times Stonepath's chief financial officer and treasurer; and Thomas L. Scully, who at all relevant times served as vice president, controller and principal accounting officer.
The complaint alleges that, throughout the Class Period, Stonepath artificially inflated its stock price by issuing false and misleading statements about the company's financial performance.
On September 20, 2004, the Stonepath stunned the market when it reported that it intended to restate its fiscal year 2003 and first and second quarter 2004 financial statements. The Company announced that, after an internal review of the process by which Stonepath's Domestic Services unit maintained its accrual for the costs of purchases transportation, it determined that the Company had understated its accrued purchased transportation liability and related costs of purchased transportation.
The Company concluded that this process did not "accurately account for the difference between the estimates and actual freight costs incurred. This allowed for the accumulation of previously unidentified costs to purchase transportation and an under-reported liability for the accrued cost."
As a result of the news, the price of Stonepath stock fell to $0.86 per share on September 21, 2004, down 46% from its close at $1.59 on September 20, 2004.
The lawsuit claims that the defendants were motivated to artificially inflate Stonepath's stock price to complete several private placements of the Company's common stock and to complete several strategic acquisitions during the Class Period.
If you purchased Stonepath common stock from May 7, 2003 through and including September 20, 2004, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Jeffrey C. Block, Esq. Julie C. Easter, Esq. One Liberty Square Boston, MA 02109 (800) 516-9926 law@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 November 23, 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=527. 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.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.