BALA CYNWYD, Pa., Aug. 9, 2002 (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 Northern District of California on behalf of all purchasers of the common stock of Riverstone Networks, Inc. ("Riverstone") (Nasdaq:RSTN) securities during the period between August 10, 2001 and June 5, 2002, 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 charges Riverstone Networks, Inc. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that, during the Class Period, defendants desperately sought to create the impression that Riverstone had the ability to directly enter these markets with a captive client base. Thus, Riverstone, through, among other things, its relationship with Hutchison Global Crossing, could compete head-to-head with the dominant companies in the industry. Prior to its relationship with Hutchison, Riverstone was having difficulty gaining operational momentum within these potentially lucrative Asian markets.
The complaint alleges that each defendant was aware that Riverstone would be unable to meet its projected Q2 02 to Q1 03 revenue and earnings per share ("EPS") targets unless they manipulated the Company's revenue, earnings and receivables. However, because the "appearance" of growth was so critical to defendants' plan to inflate the price of Riverstone shares and sell their own shares and raise monies via its $150 million debt offer, defendants continued to maintain throughout the Class Period that Riverstone would meet revenue projections and EPS when, in reality, defendants knew that Riverstone could not achieve their projections without attempting to fraudulently record revenue by inducing clients who defendants knew did not have the ability to pay to agree to take delivery of goods and that Riverstone was, in fact, suffering from greater losses. Defendants knew that if Riverstone's inability to generate legitimate sales growth from customers who could actually pay was revealed, together with the fact that Riverstone's projected growth was contingent upon sales to clients which defendants knew would be unable to pay pursuant to the Company's internal policy, if ever, due to their own financial deterioration, defendants would not reap the financial rewards of selling their own shares at artificially inflated prices which totaled $7.1 and the $150 million debt offering would be just a pipedream.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, which prosecutes class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, or to sign-up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than September 24, 2002, 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 http://www.primezone.com/ca