HARTFORD, Conn., April 6, 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 Middle District of Tennessee on behalf of all persons who purchased the common stock of America Service Group, Inc. ("ASG" or the "Company") (Nasdaq:ASGRE) between September 24, 2003 and March 16, 2006, inclusive, (the "Class Period").
The Complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements. Specifically, defendants failed to disclose the following: (i) that ASG was not charging its customers in accordance with applicable contracts; (ii) that ASG failed to properly credit customers with discounts, rebates or price savings resulting from purchases from alternative sources; (iii) that ASG failed to provide customers with proper credit for the return of pharmaceutical products; (iv) that defendants inappropriately established and used reserves during various periods over the last five years to more closely match SPP reported earnings to its budgeted results; and (v) that as a result of the foregoing, the values of ASG's net income, retained earnings and reserves were materially overstated at all relevant times.
After the markets closed, on March 15, 2006, ASG announced that as a result of the findings of an internal investigation, it would restate earnings for the years ended December 31, 2001 through December 31, 2004 and for the first six months of 2005 and issue refunds of $3.6 million, plus interest, to customers for instances in which it failed to credit them with discounts, rebates or price savings to which they were entitled. On this news, the price of ASG fell $5.65, or almost 29%, to close at $13.95 per share.
If you are a member of the class, you may, no later than June 5, 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.