NEW YORK, Feb. 11, 2002 (PRIMEZONE) -- An investor has sued the top officers of Global Crossing Ltd. (NYSE:GX) (OTCBB:GBLXQ), claiming they released false and misleading financial statements to the public, DeValerio Pease Tabacco Burt & Pucillo said today.
The compliant was filed in the U.S. District Court for the Southern District of New York and seeks damages for violations of federal securities laws on behalf of all investors who bought Global Crossing stock from January 2, 2001 through October 4, 2001 (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, visit the firm's Website at www.bermanesq.com.
The complaint charges five top Global Crossing managers with artificially inflating earnings by improperly recording and reporting cash and revenue from certain long-term lease contracts for the rights to use the company's fiber optic cable network. Simultaneously, the complaint says, Global Crossing entered into substantially similar agreements with the same companies to purchase bandwidth capacity from them in a different area. In essence, the complaint alleges that these swap transactions were improperly recorded to artificially inflate the company's financial results.
At the same time, the company was carrying an increasingly heavy debt burden that was exacerbated by an ever-shrinking market for bandwidth. This forced the company to drastically lower its prices. The company was unable to offset the declining demand for bandwidth capacity with the sale of customized provider services because, unknown to investors, the defendants had no viable plan for establishing Global Crossing as a provider of these services, the complaint says. Also during the Class period, the complaint says, the individual defendants and other Global Crossing insiders generated more that $149 million from insider stock sales.
The full extent of Global Crossing's financial crisis began to emerge on October 4, 2001 when the company announced that its third quarter 2001 cash revenues were $400 million below expectations and that it was selling off its desktop trading systems division. The complaint says that investors were also stunned by the announcement that the company's expected recurring adjusted EBITDA would fall almost $300 million less than analyst expectation. In reaction to these statements, Global Crossing stock plunged 49% to $1.07 per share.
If you purchased Global Crossing common stock during the period January 2, 2001 through October 4, 2001, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests:
Jeffrey C. Block, Esq. Michael G. Lange, Esq. Patrick T. Egan, 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 April 5, 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. To be a member of the class, however, you need not take any action at this time, and you may retain counsel of your own choice. If you decide to seek appointment as lead plaintiff, you may also retain counsel of your choice.
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 31 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