CORAL SPRINGS, Fla., March 23, 2005 (PRIMEZONE) -- The law firm of Mager White & Goldstein, LLP announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of all persons who purchased Delphi Corporation securities ("Delphi") (NYSE:DPH) between April 12, 2000 and March 3, 2005 (the "Class Period").
The complaint alleges that during the Class Period, Delphi and certain of its officers issued false and misleading statements in which Delphi's financial results were materially overstated. According to the lawsuit, these statements were based on Delphi's improper financial practices involving vendor rebates and off-balance sheet financing and other practices which are still being investigated by Delphi. The statements had the effect of artificially inflating the market price of Delphi securities, which rose as high as $17.40 per share during the Class Period. Delphi benefited from this artificial inflation by selling $400 million in preferred securities and $500 million in 6.5% unsecured notes.
On March 4, 2005, Delphi announced the resignation of CFO Alan Dawes. As a result of Delphi and certain officers engaging in fraudulent accounting practices, the Company's Audit Committee warned that Delphi's financial statements for the last four years could not be relied upon, and would have to be restated. Preliminary findings by the Company revealed that Delphi executives used roundtrip transactions or sham sales of assets, improper expense deferrals and other violations of generally accepted accounting practices to inflate their 1999-2001 reported pretax earnings by $166 million, and to increase their 1999-2003 cash flow from operations by $446.5 million.
Upon this disclosure, Delphi's stock fell to $5.41 per share before closing at $5.46 on March 4, 2005, 68% below the high of $17.40 during the Class Period, and representing a one-day drop of 14%.
If you bought Delphi securities during the class period and sustained damages, you may, no later than May 6, 2005, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative who acts on behalf of other class members in directing the litigation. Under certain circumstances, several class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by whether or not you serve as lead plaintiff. You may retain Mager White & Goldstein, LLP, or other counsel, to represent you in this action.
Mager White & Goldstein has offices in Pennsylvania and Florida. The firm's attorneys have been litigating complex commercial matters for over twenty years. Please visit the Mager White & Goldstein website (http://www.mwglawfirm.com) for additional information about the firm.
If you wish to discuss the lawsuit against Delphi with us, or have any questions about this notice or your legal rights with regard to this case, please contact the following attorney:
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.