BALA CYNWYD, Pa., Feb. 27, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
A securities class action lawsuit pending in the U.S. District Court for the Western District of Pennsylvania claims that PNC Financial Services Group ("PNC" or the "Company") (NYSE:PNC) misled shareholders about its business and financial condition.
Plaintiff seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and/or the Securities Act of 1933) on behalf of all investors who bought PNC Financial Services Group securities between July 19, 2001 and January 29, 2002 (the "Class Period").
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 of PNC Financial Services Group and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our Website at www.sbclasslaw.com.
The complaint alleges that PNC Financial Services Group certain of its officers and directors, and its auditor and consultant Ernst & Young, LLP ("E&Y") with violations of the Securities Exchange Act of 1934. Specifically, the complaint alleges that during the Class Period, defendants misrepresented PNC's financial results and issued false and misleading statements with regard to PNC's financial condition. Defendants failed to properly consolidate liabilities associated with three subsidiaries PNC had established with American Insurance Group ("AIG"). Throughout the Class Period, defendants misrepresented PNC's earnings as well as the Company's ability to reduce its liabilities related to non-performing assets. In fact, defendants failure to conform with proper accounting standards produced inflated earnings and misled investors as to PNC's true financial condition.
The complaint further alleges that while acting as auditor and a consultant for PNC, E&Y was also acting as a consultant for AIG. In fact, as PNC's auditor, E&Y approved PNC's transactions with AIG while at the same time acting as an "accounting adviser" to AIG. E&Y drew up the financial structure for the subsidiaries in question and approved them for implementation by AIG. E&Y also issued a letter that helped AIG pitch its product to banks.
On January 29, 2002, PNC announced that the Federal Reserve Board had contacted the Company about accounting inaccuracies and as a result, PNC's financial results for 2Q:01 and 3Q:01 would be restated and its financial results for 4Q:01 would be revised. PNC also stated that the updated financials would result in year-end earnings being reduced $155 million to approximately $412 million, or $1.38 a share. The Company also revealed that these accounting adjustments would cause PNC's nonperforming assets to rise by $125 million to $393 million. In addition, the Company announced that the Federal Reserve Board and the SEC were making inquiries about PNC's transactions and that PNC would cooperate with their investigations. These disclosures shocked the market, causing PNC's stock to close on January 29, 2002 down $5.79 or nearly 10% at $56.08 in extremely heavy trading volume of 6,305,100 shares.
If you purchased PNC Financial Services Group securities between July 19, 2001 and January 29, 2002, you may be a member of the class and have until April 2, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our Website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca