NEW YORK, Sept. 5, 2008 (GLOBE NEWSWIRE) -- On September 5, 2008, Scott+Scott LLP filed a class action complaint against General Electric Company ("GE" or the "Company") (NYSE:GE) and certain officers and directors in the U.S. District Court for the District of Connecticut. The action is brought on behalf of those purchasing GE common stock during the period beginning March 12, 2008 and through April 10, 2008, inclusive (the "Class Period"), for violations of the Securities Exchange Act of 1934.
If you purchased GE common stock during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than September 29, 2008. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its 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 (scottlaw@scott-scott.com, (800) 404-7770, (860) 537-5537 or visit the Scott+Scott website, http://www.scott-scott.com) for more information. There is no cost or fee to you.
The complaint alleges that during the Class Period GE made materially false and misleading statements regarding, among other things, the Company's 1Q08 earnings guidance, including earnings per share ("EPS"), the performance of GE's financial services division, the Company's sale of key real estate assets and the ability of the Company's Consumer and Industrial division and Healthcare division to sell certain products. The complaint alleges that defendants provided a 1Q08 EPS guidance of $.50-.53, and FY08 guidance of $2.42 "or greater." This would represent EPS growth of 10% at a minimum.
Despite repeated reassurance by GE directly to its investors, however, the complaint alleges that the Company shocked the market and its investors when it released its 1Q08 results on April 11, 2008. Instead of reporting a 1Q08 EPS of $0.50-0.53 and improving on 1Q07 results, as the Company had assured its investors that it would just weeks before, GE reported a significantly lower 1Q08 EPS of $0.43, down 2% from the 1Q07.
As the market reacted to these disclosures, GE's stock declined $4.70 per share from $36.75 to close at $32.05 per share on volume of over 366 million shares, representing a 13% drop that wiped out approximately $47 billion in market value, at least one analyst is quoted as stating, "The miss and cut to guidance raises credibility concerns for GE."
Indeed, the complaint alleges, it became clear at the end of the Class Period, among other things, that defendants had failed to disclose that GE's financial services division was underperforming prior representations, with the division's investments materially declining in value such that the Company would be required to record mark-to-market losses and recognize certain asset impairments, and that GE's Consumer and Industrial and Healthcare Divisions were experiencing an inability to sell certain products. Moreover, as alleged in the complaint, the Company had been depending on selling real estate assets of approximately $900 million that it had been unable to sell.
Scott+Scott has significant experience in prosecuting major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at http://www.primenewswire.com/ca/