MILWAUKEE, Jan. 10, 2002 (PRIMEZONE) -- Ademi & O'Reilly, LLP today announced that a class action has been commenced in the United States District Court for the Eastern District of Missouri on behalf of purchasers of TALX Corporation ("TALX") (Nasdaq:TALX) common stock during the period between July 18, 2001 and October 1, 2001 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than February 25, 2002. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Plaintiff's counsel, Robert O'Reilly of Ademi & O'Reilly at 866/264-3995 or via e-mail at talx@ademilaw.com. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges TALX, certain of its officers and directors and its underwriters with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. TALX Corporation is a provider of automated employment and income verification services and a provider of outsourced employee self-service applications. On August 3, 2001, TALX completed a secondary offering of 3.245 million shares of its stock (the "Secondary Offering") (including over-allotments, and also including the sale of 253,000 shares by TALX's CEO), raising gross proceeds of approximately $100 million for TALX, pursuant to a Registration Statement and Prospectus dated August 2, 2001 (referred to collectively herein as the "Registration Statement/Prospectus"). The complaint alleges that the Registration Statement/Prospectus was false and materially misleading for the following reasons: Defendants had failed to disclose that TALX had improperly capitalized significant amounts of software related to TALX's customer premised systems line of business, which assets were already substantially impaired and which would have to be written off in the near term; Defendants failed to properly account for the true value of TALX's inventory, such that the overstated value of TALX's impaired inventory would have to be written down in the near term; Defendants misrepresented that TALX's business was expanding, when it was not, and at which time Defendants were already planning on reducing staff and closing offices; Defendants were already planning to take at least $2.8 million in write-offs; and the outsourced benefits enrollment business was not operating according to the expectations that had been promoted by Defendants, and this line of business was not a significant growth-driver as represented by TALX.
The complaint further alleges that, throughout the Class Period, the same factors which were not properly disclosed in TALX's Secondary Offering Registration Statement/Prospectus were also hidden by Defendants from TALX's public shareholders. Defendants misled investors and analysts by issuing a series of false and materially misleading public statements which were designed to and which did artificially inflate the value of TALX shares. This inflation allowed TALX and its CEO to reap almost $100 million from the sale of stock.
Then, on October 1, 2001, weeks after Defendants had sold almost $100 million worth of Company stock and used over $11 million in Company stock to acquire Ti3, that Defendants issued a press release which revealed that TALX's fiscal 2002 earnings would be only $0.58-$0.62, excluding charges, on revenues of less than $50 million and that second quarter fiscal 2002 revenues would be less than $12 million. TALX also announced it would recognize charges of $2.8 million to write off capitalized software costs, inventory and to close offices.
As a result of Defendants' shocking disclosures, TALX stock declined to less than $17 per share, compared to the Class Period high of $34.28 per share, representing a loss to investors of over 50% of the value of their TALX investment by the end of the Class Period.
Plaintiff seeks to recover damages on behalf of all purchasers of TALX common stock during the Class Period, including those who purchased shares directly from TALX. The Plaintiff is represented by Ademi & O'Reilly, LLP. The Ademi & O'Reilly, LLP website (http://www.ademilaw.com) has more information about the firm.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.