NEW YORK, May 10, 2006 (PRIMEZONE) -- Roy Jacobs & Associates announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of Escala Group, Inc. ("Escala" or the "Company") (Nasdaq:ESCL) between September 5, 2003 and May 8, 2006 inclusive (the "Class Period"). Defendants include Escala and certain of its top officers and directors.
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The Complaint asserts violations of the federal securities laws and alleges that defendants made material misstatements and omitted information regarding the true nature of Escala's business and sales activities. Escala is a major distributor of collectibles including postage stamps, and one of its major customers and joint venturers is its majority shareholder, Afinsa Bienes Tangibles SA ("Afinsa").
On May 9, 2006 it was publicly reported that Spanish police had made arrests and raided the offices of Afinsa. The operation forms part of a joint investigation launched by the National Court, tax authorities, financial crime prosecutors and the National Police over an alleged pyramid-type scheme based on overpriced stamps and other collectibles. The prosecutor's office said in a statement that Spanish authorities are conducting more than 20 searches at company offices and private residences. The prosecutor's office also said it plans to conduct "several arrests" as part of a lawsuit based on charges ranging from tax evasion and money laundering to criminal insolvency and falsification of documents. The operation comes after Barron's magazine extensively reported questionable practices at Afinsa, which purportedly operates a "no-lose" stamp-sales program for investors in Spain and Portugal.
As a result of these revelations, given the high level of the integration between Afinsa's and Escala's business operations, ESCL stock fell more than 50% in heavy trading on May 9, 2006.
If you purchased Escala stock during the Class Period, you may qualify to serve as Lead Plaintiff on behalf of the Class, which consists of all persons and entities who purchased Escala stock from September 5, 2003 and May 8, 2006. You are not required to have sold your Escala stock in order to claim damages, or to serve in this role. This case will be prosecuted on a contingent fee basis. All motions for appointment as Lead Plaintiff must be filed with the Court by July 10, 2006.
Roy Jacobs & Associates has many years of successful experience representing shareholders in securities fraud class actions. Our firm will answer all questions, and provide information, at no cost or obligation to you.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca