BALA CYNWYD, Pa., August 31, 2001 (PRIMEZONE) -- Schiffrin & Barroway, LLP announced today that it recently filed lawsuits on behalf of shareholders of Trex Company, Inc., Immune Response Corporation, Scientific-Atlanta, Inc. and Qwest Communications International, Inc. for violations of the federal securities laws.
If you purchased the securities of any of the companies listed below during the respective class periods, you may be a member of the class and have until the date specified to move the court to become the lead plaintiff. For more information on a particular lawsuit and to view the complaint, you may visit our website at www.sbclasslaw.com. To learn more about your rights and interests in these cases and your ability to potentially recoup your losses, please contact Schiffrin & Barroway directly at 888-299-7706 (toll free) or 610-667-7706, fax number 610-667-7056 or by e-mail at info@sbclasslaw.com.
TREX COMPANY, INC. (NYSE:TWP) (11/02/00 - 06/18/01). The complaint charges Trex and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that throughout the Class Period, defendants issued several press releases announcing their financial results and filed financial statements with the SEC, which reported dramatic increases in quarterly revenues during the Class Period. However, defendants failed to reveal that the increase in sales was due to improper sales practices including "channel stuffing" (or flooding distributors with excess product which defendants knew could not possibly be sold) in order to report increased revenues, and through the offering of "extended payment terms" to distributors. The truth was finally disclosed on June 18, 2001, when the company announced that because of its customers' excess inventories, it had experienced substantially reduced sales and expected to achieve only $66 to $68 million in revenues for the first half of 2001, a far cry from the $81 million in expected revenues originally announced. As a result of this disclosure, Trex's stock price fell $7.98 to close at $18.50 on June 19, 2001, with over 1.3 million shares traded. The complaint was filed in the U.S. District Court for the Western District of Virginia. The lead plaintiff motion must be filed no later than September 10, 2001.
IMMUNE RESPONSE CORPORATION (Nasdaq:IMNR) (Class Period: 05/17/99 - 0706/01). The complaint alleges that during the Class Period, defendants made false and misleading statements about the efficacy of the Company's REMUNE product which was intended to stimulate an HIV-infected person's immune system to attack HIV. Defendants misstated and manipulated the results of a study performed on REMUNE which ended in May 1999 and then attempted to prevent scientists who performed the study from divulging the results to the public. As a result of the defendants' false statements, Immune Response's stock price traded at inflated levels during the Class Period, increasing to as high as $18.31 on March 6, 2000. Defendants took advantage of this inflation, completing a secondary public offering of 2.76 million shares of Immune Response stock in August 2000 for net proceeds of $14.9 million. The complaint was filed in the U.S. District Court for the Southern District of California. The lead plaintiff motion must be filed no later than September 11, 2001.
SCIENTIFIC-ATLANTA, INC. (NYSE:SFA) (Class Period: 04/19/01 - 07/19/01). The complaint charges Scientific-Atlanta and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that on May 11, 2001, in a Form 10-Q that was filed with the Securities and Exchange Commission, the Company reported its financial results and highlighted an increase in production capacity of set-tops. The complaint further alleges that on July 19, 2001, Scientific-Atlanta reported its financial results for the fiscal fourth quarter of 2001 and shocked the market by reporting a 21% decline in bookings from the previous year's fourth quarter. The complaint alleges that this decline in bookings was attributable to, among other things, a surplus in customer inventory levels, which defendants knew, or should have known, at the time they filed the Company's Form 10-Q on May 11, 2001, making the representations in the Form 10-Q regarding production capacity materially false and misleading. Additionally, the complaint alleges that when the Company announced that it was revising its earnings estimates for the first quarter of fiscal 2002, the market reaction to this announcement was immediate and severe in that shares of Scientific-Atlanta plummeted by more than 34%, or $12.08, to close at $23 per share, on heavy trading volume. The complaint was filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division. The lead plaintiff motion must be filed no later than September 24, 2001.
QWEST COMMUNICATIONS INTERNATIONAL, INC. (NYSE:Q) (Class Period: 03/22/01- 07/23/01). The complaint charges Qwest and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that on March 22, 2001, defendants Joseph Nacchio and Robin Szeliga appeared at a UBS Warburg hosted senior management meeting where they falsely claimed that they would legitimately achieve 1Q01 and FY01 EPS of $0.11 and $0.59, respectively. On April 24, 2001, Qwest reported its financial results for 1Q01, including revenue growth of 12% and EBITDA growth of 16%. Subsequent to these statements, Qwest's stock price increased, trading as high as $41.83 on April 30, 2001. In fact, Qwest's 1Q01 results and its statements regarding those results as well as the statements regarding the success of the integration with U.S. West Inc. and the Company's strong expense controls were materially false and misleading due to the Company's improper valuation of KPNQwest in violation of Generally Accepted Accounting Principles ("GAAP"). The complaint further alleges that defendants failed to disclose the following facts: (a) Qwest's 1Q01 earnings were better than expectations primarily due to its change in the discount rate to calculate its pension obligations, increasing Qwest's 1Q01 results by at least $0.03; (b) Qwest's 1Q01 earnings were better than expectations due to defendants' failure to properly "write-down" the value of Qwest's holdings in KPNQwest, which was materially overstated as a result; (c) Qwest's 1Q01 earnings were increased by $0.01-$0.02 due to its aggressive use of capitalization to classify tens of millions of dollars of interest and software development costs as assets rather than expenses, which would contribute to decreased earnings in future quarters; (d) there was no way Qwest's future earnings would be nearly as strong as represented due in part to the accounting manipulations defendants engaged in which would adversely affect future results, as expenses were being deferred to future quarters and years; and (e) Qwest's selling, general and administrative ("SG&A") expenses were only 22% of sales, not due to tight expense controls as represented, but due to improper classification of SG&A expenses as cost of sales. Subsequently, on July 20, 2001, Qwest admitted that its classification of costs had been incorrect such that cost of sales had been overstated and SG&A expenses had been understated.
As a result of defendants issuance of alleged material and misleading statements (including a false 1Q01 financial statement), Qwest's stock traded as high as $41.83 per share. The individual defendants took advantage of this inflation, selling 1,255,000 shares of their Qwest stock for proceeds of $49.5 million. Ultimately, on July 24, 2001, Qwest conceded that it recorded a write-down of over $3.1 billion, primarily related to its ownership in KPNQwest. Upon this admission/revelation, Qwest's shares dropped once again, trading below $27. The complaint was filed in the U.S. District Court for the District of Colorado. The lead plaintiff motion must be filed no later than September 25, 2001.
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder in any of the companies listed above and would like to be a lead plaintiff in one of these securities class actions, please contact Schiffrin & Barroway at 888-299-7706.