COLCHESTER, Conn., March 23, 2006 (PRIMEZONE) -- Scott+Scott filed a securities class action in the United States District Court for the Southern District of New York on behalf of all securities purchasers of H&R Block, Inc. ("H& R Block" or the "Company") (NYSE:HRB) during the period February 24, 2004 through March 14, 2006, inclusive (the "Class Period"), seeking remedies for federal securities law violations. During the Class Period, according to the complaint, defendants caused H&R Block's shares to trade at artificially inflated levels by issuing false and misleading financial statements. As a result of this inflation, H&R Block was able to: (i) offer for sale and sell $400 million 10-year senior unsecured notes in reliance on defendants' false and misleading financial reports; (ii) declare higher quarterly stock dividends than might otherwise be possible absent the sale of its debt securities; and (iii) award defendants cash and stock-based compensation based in part on the inflated value of the Company's stock.
If you purchased H&R Block securities during the Class Period and wish to serve as a lead plaintiff in the action, you must move the court no later than May 16, 2006. Any purported class member may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott partner David R. Scott (drscott@scott-scott.com, 800/404-7770) or visit the Scott+Scott website, www.scott-scott.com, for more information. There is no cost or fee to you.
In addition to concealing the false and misleading nature of the Company's financial statements, defendants also concealed the Company's potential exposure to lawsuits stemming from the fraudulent nature and operation of H&R Block's investment products. Unbeknownst to investors, defendants induced their customers to open investment accounts, using a marketing strategy that consistently misrepresented the benefits and concealed the deficiencies of those accounts. On the basis of confidential communications dating from prior to the beginning of the Class Period, there can be no doubt that defendants were well aware of the deceitful nature of this marketing strategy and scheme.
On February 23, 2006, after the close of the markets, defendants shocked investors with the news that the Company's management and its Audit Committee, in consultation with the Company's independent auditors, KPMG LLP, would undertake a restatement of the Company's previously issued consolidated financial statements, including fiscal year 2006 quarterly financial statements and financial statements for the fiscal years ended April 30, 2005 and 2004.
Finally, on March 15, 2006, investors learned of a $250 million lawsuit by the New York Attorney General, addressing fraudulent marketing practices involving the Company's IRA products. The suit deflated the expectations of the investment community, in reliance on promised results from the Company's Financial Advisory segment. On this news, the price of H&R Block shares tumbled, from the previous close of $22.00 on March 14, 2006, to close $20.63 on March 15, 2006, for a loss of $1.37 or another 6.2% percent, on volume of over 14 million shares, nearly seven times normal daily volume.
The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide. Cases currently being litigated and/or investigated by Scott+Scott include: Priceline.com; Guidant Corp.; Halliburton Co.; Odyssey Re Holdings and Fairfax Financial Holdings, Ltd., among others.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.