NEW YORK, March 19, 2004 (PRIMEZONE) -- An investor sued Nortel Networks Corporation (NYSE:NT) today, claiming the company and three top officers issued misleading financial statements.
Berman DeValerio Pease Tabacco Burt & Pucillo (http:www.bermanesq.com) filed the class action in the U.S. District Court for the Southern District of New York. The lawsuit seeks damages for violations of federal securities laws on behalf of all investors who bought Nortel common stock from October 23, 2003 through and including March 12, 2004 (the "Class Period").
Berman DeValerio has represented investors in class actions since 1982. To receive a copy of the complaint, you may contact the court, call the firm at (800) 516-9926 or go to http://www.bermanesq.com/pdf/NortelNetworks2-Cplt.pdf .
The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission (SEC) Rule 10b-5.
According to the complaint, the defendants materially misrepresented Nortel's financial condition during the Class Period, causing the company's stock to trade at artificially high prices.
Specifically, Nortel misled the investing public by saying that the company's comprehensive review and analysis of its assets and liabilities had been completed and that its accounting problems were resolved. In reality, the lawsuit says, the review was ongoing and subsequent findings from the analysis actually led Nortel to announce that it would need to revise its previously announced financial results.
On October 23, 2003, Nortel shocked the investment community by revealing that the company would restate previously reported financial results for fiscal years 2000, 2001, 2002, and the first two quarters of fiscal year 2003 as a result of findings from a comprehensive review of its assets and liabilities. Nortel reported that approximately $950 million of liabilities carried on its previously reported balance sheets would need to be moved into prior periods. The company also reported that its audit committee would undertake an independent review of the circumstances leading to the restatement.
Then, after the close of trade on March 10, 2004, Nortel further shocked investors by announcing a delay in filing its annual report for the year ended December 31, 2003. The company reported that details arising from its audit committee's investigation lead Nortel to re-examine the establishment, timing of, support for, and release to income of certain accruals and provisions in prior periods. Nortel said it would likely need to revise its previously announced results for the year ended December 31, 2003 and the results reported in some of its 2003 quarterly reports. Nortel also said it would likely need to restate its previously filed financials for one or more earlier periods for a second time.
In reaction to this news, Nortel's common stock fell $0.51 per share, or 7.4%, from $6.88 per share on March 10, 2004 to close at $6.37 per share on March 11, 2004.
Then, before the markets opened on March 15, 2004, Nortel further announced that its chief financial officer, Douglas Beatty, and controller, Michael Gollogly, were placed on paid leave of absence pending completion of the audit committee's review.
As a result of this announcement, the value of Nortel's stock fell $1.19, or 18.5%, from $6.43 per share on March 12, 2004 to close at $5.24 per share on March 15, 2004.
If you purchased Nortel Networks Corporation common stock from October 23, 2003 through and including March 12, 2004, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Nicole R. Starr, Esq. Michael T. Matraia, Esq. One Liberty Square Boston, MA 02109 (800) 516-9926 law@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 May 17, 2004. 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, or you may submit information online at http://www.bermanesq.com/Securities/Signup1.asp?caseid=504. Please note, you may also retain counsel of your choice and need not take any action at this time to be a class member.
Berman DeValerio Pease Tabacco Burt & Pucillo 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, Fla.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca