PHILADELPHIA, Feb. 27, 2001 (PRIMEZONE) -- The law firm of Berger & Montague, P.C. (http://www.investorprotect.com), filed a class action in the United States District Court for the Western District of Oklahoma on behalf of all persons or entities who purchased Pre-Paid Legal Services, Inc. ("Pre-Paid Legal") (NYSE:PPD) securities during the period from April 19, 1999 through January 16, 2001, inclusive.
Pre-Paid Legal develops, underwrites and markets legal expense plans. During the Class Period, Pre-Paid Legal treated its sales associates' commissions as assets instead of expenses, in violation of accepted accounting principles, which caused Pre-Paid Legal's earnings, income and stock price to be artificially inflated. Some of the other undisclosed consequences of the Company's commission policy are:
-- Pre-Paid Legal is exposed to the risk of uncollectible commission advances; -- the Company capitalizes its commission expenses over too long a period of time; -- Pre-Paid Legal has not written-off any of the associates' receivables; -- the Company does not reclassify and disclose the nature of the receivables; -- Pre-Paid Legal has overstated income by failing to take adequate reserves for losses on uncollectible commission advances.
Because the defendants monitored Pre-Paid Legal's business closely, they were aware that the Company's financial condition was deteriorating, earnings forecasts could not be achieved and that their positive announcements about growth of their sales associates and memberships were misleading. At no time did they disclose any of this information to investors.
The complaint charges Pre-Paid Legal and two of its highest officers with violations of Sections 10 and 20(a) of the Securities and Exchange Act of l934 for improper accounting practices and materially false and misleading statements in its public statements and filings with the SEC.
If you purchased Pre-Paid Legal securities during the period from April 19, 1999 through January 16, 2001, inclusive, you may, no later than March 23, 2001 move to be appointed lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery, is not, however, affected by the decision whether or not to serve as a lead plaintiff.
The law firm of Berger & Montague, P.C. has over 50 attorneys, all of whom represent plaintiffs in complex litigation. The Berger firm has extensive experience representing plaintiffs in class action securities litigation and has played lead roles in major cases over the past 25 years which have resulted in recoveries of several billion dollars to investors. The firm is currently representing investors as lead counsel in actions against Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken and IKON Office Solutions, Inc. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:
"Class counsel did a remarkable job in representing the class interests." In Re: IKON Offices Solutions Securities Litigation. Civil Action No. 98-4286(E.D.Pa.) (partial settlement for $111 million approved May, 2000). "...[Y]ou have acted the way lawyers at their best ought to act. And I have had a lot of cases ... in 15 years now as a judge and I cannot recall a significant case where I felt people were better represented than they are here... I would say this has been the best representation that I have seen." In Re Waste Management, Inc. Securities Litigation, Civil Action No. 97-C 7709 (N.D. Ill.) (settled in 1999 for $220 million).
If you purchased Pre-Paid Legal securities, or have any questions concerning this notice or your rights with respect to this matter, you may contact:
Sherrie R. Savett, Esquire Karen S. Orman, Esquire Kimberly A. Walker, Investor Relations Manager Berger & Montague, P.C. 1622 Locust Street Philadelphia, PA 19103 Phone: 888-891-2289 or 215-875-3000 Fax: 215-875-5715 Website: http://www.investorprotect.com e-mail: InvestorProtect@bm.net John J. Breathwit, Esquire Babette Patton, Esquire Breathwit & Patton 101 Park Avenue, Suite 460 Oklahoma City, Oklahoma 73102 (405) 415-1779
More information on this and other class actions can be found at www.primezone.com/ca