HARTFORD, Conn., March 30, 2006 (PRIMEZONE) -- The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired the publicly traded securities of The Estee Lauder Companies Inc. ("Estee Lauder" or the "Company") (NYSE:EL) between April 28, 2005 and October 25, 2005, inclusive, (the "Class Period").
The Complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements. Specifically, while the Company's market share was decreasing, defendants launched a largely successful campaign that employed channel stuffing and the dissemination of materially false statements to prop up reported revenues and earnings and the Company's share price.
The truth began to emerge on September 19, 2005 when defendants disclosed that the Company would not meet its guidance for the first half of fiscal 2006. On this news, the Company's stock fell 9%, from $40.51 to $36.05 per share. The stock, however, continued to trade at artificially inflated levels until October 26, 2005 when defendants disclosed that, for the first quarter of fiscal 2006, the Company would earn only $61.8 million, or $0.28 per share, down 38% from the previous year's earnings of $95.7 million, or $0.41 per share, on essentially flat sales. These results were well below analysts' revised consensus earnings estimate of $0.32 cents a share on revenue of $1.54 billion. Following this disclosure, the stock fell to $30.71. While the Company's shares were artificially inflated, insiders sold 3,380,399 shares of their Estee Lauder common stock for proceeds of $88,077,150.
If you are a member of the class, you may, no later than May 29, 2006, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz & Nobel has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at sn06106@aol.com, or visit our website: www.snlaw.net.