BALA CYNWYD, Pa., July 17, 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. ("Singing Machine" or the "Company") (AMEX:SMD) from February 14, 2001 through July 14, 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 February 14, 2001 and July 14, 2003, thereby artificially inflating the price of 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 the Company avoided taking sufficient changes to earnings in 2001 and 2002 to account for income tax liabilities; and (4) that as a result, the Company's financial results were materially overstated at all relevant times.
On June 27, 2003, the Singing Machine 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. Market reaction to the news was swift. The Singing Machine's shares fell 33%, or $1.80 per share, to close at $3.60 per share on June 27, 2003. On July 14, 2003, the Company announced further details about its restatement and also announced that "its auditors have expressed 'substantial doubt' about Singing Machine's ability to continue as a going concern." News of this again shocked the market. Shares of the Singing Machine fell 19% percent to close at $3.03 per share on July 15, 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