BALA CYNWYD, Pa., July 3, 2003 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of Florida on behalf of all purchasers of the common stock of The Singing Machine, Inc. ("The Singing Machine" or the "Company") (AMEX:SMD) from August 9, 2001 through June 27, 2003, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between August 9, 2001 and June 27, 2003, thereby artificially inflating the price of The Singing Machine common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income in violation of Generally Accepted Accounting Principles ("GAAP"); (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times; (4) that the Company avoided taking sufficient changes to earnings in 2001 and 2002 to account for income tax liabilities; and (5) that as a result, the Company's financial results were materially overstated at all relevant times.
On June 27, 2003, the Company announced that it would restate its fiscal 2002 financial statements and possibly fiscal 2001 financial statements to increase the accrual for income taxes. Moreover, the Company stated that the restatement will have the effect of reducing net income for fiscal 2002 and possibly fiscal 2001. News of The Singing Machine's restatement shocked the market. Shares of The Singing Machine fell 33%, or $1.80 per share, to close at $3.60 per share on June 27, 2003.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/currentcases.cfm.
If you are a member of the class described above, you may, not later than September 2, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca