NEW YORK, Aug. 8, 2005 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class action on behalf of persons or entities who purchased or otherwise acquired the securities of Investors Financial Services Corp. (Nasdaq:IFIN) ("IFIN" or the "Company") from October 15, 2003, through and including July 15, 2005 (the "Class Period").
The action, entitled The Archdiocese of Milwaukee Supporting Funds v. Investors Financial Services Corp., et al., Case No. 1:05-cv-11627-RCL, is pending in the United States District Court for the District of Massachusetts and names as defendants, the Company, its Chairman and Chief Executive Officer, Kevin J. Sheehan, its President, Michael F. Rogers, its Senior Vice President and Chief Financial Officer, John N. Spinney Jr., its Senior Vice President, Robert D. Mancuso, and its Senior Vice President, Edmund J. Maroney. 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 alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of false and material misrepresentations to the market, thereby artificially inflating the price of IFIN securities. The Company's statements served to convince investors that the Company's financial statements were accurate, including results for revenues, growth and interest income, and the Company had shrewdly built into its models and assumptions the impact of continued interest rate compression and flattening of the US interest rate yield curve.
IFIN is a bank holding company for Investors Bank & Trust Company and provides asset managers with services including global custody, multi-currency accounting and mutual fund administration in the United States. In October 2004, the Company surprised the market when they finally revealed the need to restate financial results over a three-year period. On October 21, 2004, the price of IFIN stock plummeted, from its previous close of $43.70 to $36.50, on volume of over 11 million shares. Later, the Company revealed that during the period from 2001 to 2004, Investors had overstated net interest income by as much as $6.2 million.
On July 14, 2005, IFIN dropped 15% after the financial back-office company slashed earnings guidance, citing interest rate pressure. Once again, the Company announced an unprecedented "reset" of their 2005 quarterly and 2005 yearly guidance. Defendants did this, allegedly, to bring their numbers in line with the "new" realities of market-driven rates and rate spreads. The Complaint alleges further that IFIN's assertions that an interest rate event peculiar to the second quarter served as the purported "trigger" for the Company's changed circumstances. This was false. In fact, the Complaint alleges, the change in the Company's fortunes was a direct result of the dramatic flattening of the yield curve and contraction of rate spreads. The Company cited a flatter-than-expected yield curve; narrower-than-expected reinvestment spreads; weaker-than-expected market-sensitive revenues, which included fees, linked to both the equity and foreign currency markets; and continued investments in headcount and technology to support new and existing clients.
On July 15, 2005, the price of IFIN shares plummeted from its previous close of $41.52 to $34.05 for a loss 17.9% percent of their value on unprecedented volume of over 22 million shares. The Class Period high was $53.44; it now trades under $35 per share.
If you are a member of the class described above, you may, not later than October 3, 2005 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:
Jeffrey M. Norton (jmn@whesq.com) Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400