NEW YORK, June 18, 2002 (PRIMEZONE) -- A class action complaint has been filed in the United States District Court for the Central District of California, civil action number 02-CV-04771 FMC(JTLX), on behalf of all persons or entities who purchased Specialty Laboratories, Inc. ("Specialty Labs" or the "Company") securities (NYSE:SP) between December 8, 2000 and April 10, 2002, both dates inclusive (the "Class Period"). Specialty Laboratories, Inc., Paul F. Beyer, James B. Peter, Frank J. Spina, Richard E. Belluzzo, Deborah A. Estes, Douglas S. Harrington, William J. Nydam, Thomas R. Testman, Thomas E. England, Bart E. Thielen, and John W. Littleton are named as defendants in the action.
To discuss this action, this announcement, or your rights or interests, please contact plaintiff's counsel, Eric Belfi or Sharon Lee, Rabin & Peckel LLP, 275 Madison Avenue, New York, NY 10016, by telephone at (800) 497-8076 or (212) 682-1818, by facsimile at (212) 682-1892, or by e-mail at email@rabinlaw.com.
The Complaint alleges that defendants violated section 11 of the Securities Act of 1933, section 10(b) of the Securities and Exchange Act of 1934, and SEC Rule 10b-5 by issuing a series of materially false and misleading statements concerning its business and financial condition.
The complaint alleges that in June and October of 2001, the California Department of Health Services representing the State of California and acting as agent of the Centers for Medicare and Medical Services ("CMS"), inspected Specialty Labs. The inspectors were mortified by their findings. As a result of the inspections, Specialty Labs was initially cited by the State of California with 20 deficiencies, and then in a separate statement in February 2002 for 12 overlapping deficiencies by CMS. Specialty Labs was notified that if it failed to correct 6 of the issues, relating primarily to personnel licensing and the enforcement of regulatory requirements, the Company would face monetary and other penalties, including the possible revocation of its license. Specialty Labs' deficiencies in question relate to two broad areas, both of which focus on the number of licensed personnel in the lab. First, historically there have been required ratios for labs in terms of the number of licensed supervisors per the number of testing personnel. Second, California implemented a requirement for labs performing testing in the areas of cytogenetics and molecular genetics. Specifically, directors of such operations must now be at least at the M.D. or Ph.D. level and must also be Board certified in their area of focus. However, defendants sought to avoid compliance with California's laboratory requirements in order to inflate the Company's revenue and EPS.
On April 11, 2002, before the market opened, the Company issued a press release which provided a more comprehensive explanation and discussion of the compliance problems. On this news, the Company's shares plunged to an all time low of $10-1/4, more than an 80% drop from the Class Period high.
Plaintiff is represented by the law firm of Rabin & Peckel LLP. Rabin & Peckel LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States. You can learn more information about Rabin & Peckel LLP at www.rabinlaw.com.
If you purchased Specialty Labs securities between December 8, 2000 and April 10, 2002, you may, no later than July 8, 2002 move the Court to serve as lead plaintiff. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this action as a lead plaintiff online at www.rabinlaw.com. If you wish to discuss this action further or have any questions concerning this announcement, or your rights or interests, please contact plaintiff's counsel, Eric Belfi or Sharon Lee, Rabin & Peckel LLP, 275 Madison Avenue, New York, NY 10016, by telephone at (800) 497-8076 or (212) 682-1818, by facsimile at (212) 682-1892, or by e-mail at email@rabinlaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.