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BearingPoint Announces Financial Restatement

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Case ID: 2656 | Stocks | 08/19/2004

A class action has been filed against business consulting and systems integration company BearingPoint, Inc. (NYSE: BE) and certain of its officers and directors by stockholders who purchased the company's common stock between October 30, 2002, and August 13, 2003. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

On August 14, 2003, before the market opened, the defendants shocked the public when they issued a press release and concurrently filed a Form 8-K with the Securities and Exchange Commission announcing that BearingPoint's financial results would be restated for the first three quarters of fiscal 2003 due to acquisition- and accounting-relating adjustments. The market's reaction to the announcement was swift and drastic. The same day, the price per share of BearingPoint common stock fell $2.41, or 23 percent from its previous day's trading to close at $7.90, on unusually heavy trading volume.


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