NEWARK, N.J., July 15, 2002 (PRIMEZONE) -- Shareholders are pursuing a securities class action, claiming that Merck & Co., Inc. (NYSE:MRK) and several top officers improperly inflated revenues by billions of dollars, Berman DeValerio Pease Tabacco Burt & Pucillo said today.
The complaint was filed July 1 in the U.S. District Court for the District of New Jersey. It seeks damages for violations of federal securities laws on behalf of all investors who bought Merck common stock from July 1, 1999 through June 21, 2002 (the Class Period).
Berman DeValerio has represented investors in class actions for 20 years. To review the complaint and learn more about becoming a lead plaintiff, please visit the firm's website at www.bermanesq.com. According to the complaint, Merck overstated revenues by billions of dollars from its subsidiary Merck-Medco Managed Care, L.L.C. by including consumer co-payments for prescription drugs in its revenues.
During the Class Period, Merck-Medco's revenues made up over 50% of Merck's total revenues. The lawsuit claims that Merck violated Generally Accepted Accounting Principles because neither company bills for the co-payments, gets billed for them, or otherwise comes into contact with co-payment money. Patients make co-payments directly to pharmacies when they purchase medicine.
On June 21, 2002, The Wall Street Journal reported on Merck's accounting practices and estimated that Merck and Merck-Medco may have pumped up their 2001 revenues by as much as $4.6 billion. Similar overstatements may have occurred for 1999 and 2000, the complaint says. That same day, according to the complaint, a Merck spokesman admitted that the company had been recording prescription drug co-payments as revenue since it acquired Merck-Medco in 1993. In the wake of these revelations, Merck's stock immediately dropped 4.25% from its closing price of $52.20 on June 20, 2002 to a closing price of $49.98 on June 21, 2002, its lowest closing price since late 1997.
After the complaint was filed, Merck shares fell again when the Journal reported that the company admitted, in a regulatory filing, booking $12.4 billion in Merck-Medco revenue that it had never collected.
If you purchased Merck & Co., Inc. common stock during the period July 1, 1999 through June 21, 2002, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Steven D. Morris, Esq. Michael G. Lange, Esq. One Liberty Square Boston, MA 02109 (800) 516-9926 law@bermanesq.com
You may also visit the firm's website at www.bermanesq.com.
If you wish to apply to be lead plaintiff in this action, a motion must be filed on your behalf with the court no later than August 30, 2002. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. You may also retain counsel of your choice. To be a member of the class, however, you need not take any action at this time.
Berman DeValerio Pease Tabacco Burt & Pucillo (www.bermanesq.com) prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities fraud, antitrust law violations and consumer fraud. The firm consists of 34 attorneys in Boston, San Francisco and West Palm Beach, Florida.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca