WASHINGTON, May 9, 2005 (PRIMEZONE) -- The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has filed a lawsuit on behalf of its client and on behalf of other similarly situated purchasers of the securities of Xybernaut Corporation ("Xybernaut") (Nasdaq:XYBRE) common stock between May 10, 2002 and April 8, 2005, inclusive (the "Class Period"), in the United States District Court for the Eastern District of Virginia.
The Complaint charges Xybernaut and Grant Thornton LLP with violation of Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, and Edward G. Newman, Steven A. Newman, M.D., and Thomas D. Davis with violations of Sections 10(b) and 20(a) of the Exchange Act. The Complaint alleges that defendants omitted or misrepresented material facts about its financial condition, business prospects, revenue expectations and internal controls during the Class Period.
The Complaint alleges that on May 2, 2002, the Company released a materially false and misleading press releasing announcing "the highest first quarter results in the Company's history." Further, it is alleged that on March 14, 2005, Xybernaut announced that it was seeking an extension of time within which to file its annual report with the Securities and Exchange Commission ("SEC"). Moreover, it is alleged that on March 31, 2005, Xybernaut issued a press release which stated, in part: "Xybernaut Corporation (Nasdaq:XYBRE) announced today that the filing of its Form 10-K and other related reports for the year ended December 31, 2004, anticipated to occur today, will be further delayed, pending completion of an internal investigation undertaken by its Audit Committee." The press release stated that independent counsel had been engaged to assist in an internal investigation of, "among other things, concerns brought to the Audit Committee's attention relating to the internal control environment of the Company, the propriety of certain expenditures and the documentation of certain expenses of the Chairman and CEO of the Company, the Company's transparency and public disclosure process, the accuracy of certain public disclosures, management's conduct in response to the investigation, and the propriety of certain major transactions." Moreover, the press release stated that Xybernaut had received a subpoena from the Northeast Regional Office of the SEC seeking "documents and other information relating to the sale of Company securities by any person identified as a selling shareholder in any Company registration statement or other public filing." Following this news, Xybernaut's share price, which at one time had traded as high as $2.23 per share, fell to a close of $0.42 per share on March 31, 2005, and then dropped further to close at $0.24 per share on April 1, 2005.
If you are a member of the class, you may, no later than June 14, 2005, request that the Court appoint you as Lead Plaintiff of the class. Any member of the purported class may move the Court to serve as Lead Plaintiff through counsel of their choice or may choose to remain an absent class member.
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has significant experience in prosecuting investor class actions and actions involving securities fraud. The firm has offices in Washington, D.C., New York, Philadelphia and Chicago, and is active in major litigation pending in federal and state courts throughout the nation. You may visit the firm's website at www.cmht.com.
The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total in the billions of dollars.
If you have any questions about this notice or the action, or with regard to your rights, please contact either of the following:
Steven J. Toll, Esq. Gail D. Regina Cohen, Milstein, Hausfeld & Toll, P.L.L.C. 1100 New York Avenue, N.W. West Tower (Suite 500) Washington, D.C. 20005 Telephone: (888) 240-0775 or (202) 408-4600 E-mail: stoll@cmht.com or gregina@cmht.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca