NEW YORK, Nov. 15, 2002 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit was commenced in the United States District Court for the Southern District of New York on behalf of all purchasers of Footstar, Inc. ("Footstar" or the "Company") (NYSE:FTS) securities between February 8, 2002 and November 12, 2002, inclusive (the "Class Period"). A copy of the complaint filed in this action can be viewed on the firm's website at www.faruqilaw.com.
The complaint charges defendants with violations of federal securities laws by, among other things, issuing a series of materially false and misleading press releases concerning Footstar's financial results and business prospects. Specifically, the complaint alleges that Footstar failed to disclose and/or misrepresented the following fact, among others: (i) that, since at least 2001, the Company cumulatively understated its accounts payable by approximately $35 million; and (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company. As a result, the value of the Company's balance sheet and financial results were materially overstated at all relevant times, helping artificially inflate the price of the Company's securities throughout the class period. On November 13, 2002, however, Footstar stunned the market by disclosing that it had "discovered discrepancies in the reporting on its account payable balances." Moreover, the Company indicated that it will likely restate its financial statements for the first nine months of 2002 as well as prior periods including 2001 and earlier. Upon this revelation, shares of Footstar plummeted approximately 20% to close at $5.05 per share after hitting an intraday low of $3.30 on volume amounting to nearly six times Footstar's average daily trading volume.
Plaintiff seeks to recover damages on behalf of himself and all other individual and institutional investors who purchased or otherwise acquired Footstar securities between February 8, 2002 and November 12, 2002, excluding defendants and their affiliates. Plaintiff is represented by Faruqi & Faruqi, LLP, a law firm with extensive experience in prosecuting class actions, and significant expertise in actions involving corporate fraud.
If you wish to obtain information concerning joining this action you can do so under the "Join Lawsuit" section of our website at www.faruqilaw.com
If you purchased Footstar securities during the Class Period, you may, not later than January 13, 2002, move the court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action, or have any questions concerning this notice or your rights or interests, please contact:
ERIC CRUSIUS, ESQ.
ANTHONY VOZZOLO, ESQ.
FARUQI & FARUQI, LLP
320 East 39th Street
New York, NY 10016
Telephone: (877) 247-4292 or (212) 983-9330
e-mail: ECrusius@faruqilaw.com
Avozzolo@faruqilaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.