NEW YORK, Oct. 15, 2004 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit on behalf of all purchasers of First Virtual Communications, Inc. securities ("First Virtual" or the "Company") (Pink Sheets:FVCC) during the period between March 29, 2004 and August 23, 2004 (the "Class Period").
The complaint alleges that defendants engaged in a "pump and dump" scheme that enabled Company insiders to profit at the expense of class members by selling over a million shares of their personally held First Virtual securities at artificially inflated prices. Specifically, defendants issued materially false and misleading statements about the Company's financial condition and sales of its real-time rich media communications software and services and specialized networking hardware equipment worldwide, and a contract to provide the United States Air Force with the Company's proprietary Click to Meet(TM) web communications infrastructure and solutions. In reaction to these statements, the price of First Virtual stock skyrocketed 161% between February 5, 2004 and April 6, 2004, allowing certain Company insiders to sell over 1.98 million shares of their personally held First Virtual stock for proceeds of more than $8.5 million.
On April 30, 2004, the truth about the Company's financial condition began to emerge. On that day, defendants announced that the Company's audit committee had commenced an investigation into certain irregular sales transactions, and that until the review was completed, the Company would not be able to release its first-quarter earnings or file its Form 10-Q with the SEC. In reaction to this news, the price of First Virtual stock fell 37% from its previous day's closing price. As a result of its failure to comply with the SEC's filing requirements, First Virtual's securities were subject to delisting by the Nasdaq SmallCap market. On August 5, 2004, defendants announced that the Company had received a letter from Nasdaq which granted the Company a conditional temporary extension to file its first quarter 2004 report. On August 17, 2004, defendants disclosed that (i) the Company could not meet the conditions of its temporary filing extension; (ii) the Company had incurred $2.1 million in expenses directly related to the investigation; (iii) the Company was in danger of defaulting on a $3.0 million credit facility agreement; and (iv) based on the Company's profit and loss projections for the remainder of 2004, its stockholder equity would fall below Nasdaq's listing requirements. On August 24, 2004, before the market opened, defendants disclosed that the Company's request for an extension to comply with Nasdaq's listing and filing requirements had been denied, and that the Company's securities would be delisted from the Nasdaq SmallCap at the commencement of trading on August 25, 2004. In reaction to that news, the price of First Virtual stock fell 47 percent from its previous trading day's closing price, to close at $0.37 per share.
If you purchased or acquired the shares of First Virtual, on any world exchange, between March 29, 2004 and August 23, 2004, and sustained damages, you may, no later than October 25, 2004, move the Court to serve as lead plaintiff of the class. Shareholders outside the United States may also join the action, regardless of where they live or which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP.