HARTFORD, Conn., July 19, 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 Zale Corporation ("Zale" or the "Company") (NYSE:ZLC) between February 18, 2005 and May 5, 2006, inclusive, (the "Class Period").
The Complaint alleges that Defendants violated federal securities laws by issuing a series of materially false statements. Specifically, the representations in the Company's reported results of operations materially overstated Zale's net cash flows and free operating cash flows. In addition, the Company improperly accounted for extended service agreements, leases and accrued payroll.
On April 10, 2006, before the open of regular trading, the truth began to emerge as Zale announced that the SEC had initiated a broad investigation into many aspects of the Company's accounting, operations and disclosure practices, including Zale's accounting for extended service agreements, leases and accrued payroll, executive compensation and severance, earnings guidance, stock trading and the timing of vendor payments. In reaction to this announcement, the price of Zale stock fell from $27.80 per share on April 7, 2006 to $25.16 per share on April 10, 2006. Then on Friday, May 5, 2006, after the market closed, Zale announced that it had replaced its Chief Financial Officer, Defendant Lenz, after discovering that the Company improperly inflated its reported net cash flows and free cash flows. On this news, the price of Zale stock dropped by $0.44 per share to close at $24.18 on May 8, 2006.
If you are a member of the class, you may, no later than September 18, 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.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca