Several class actions have been filed against sportswear manufacturer Vans, Inc. (Nasdaq: VANS) and certain of its officers and directors by stockholders who purchased the company's common stock between March 24, 1999, and May 23, 2002. The actions claim 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.

The action alleges that, beginning in 1998, the defendants orchestrated a scheme in which Vans “posted” product to three separate Distribution Centers, including Unique Services, Pronto Services and Special Dispatcher, in order to inflate EPS on a quarterly basis. This scheme allegedly took place each quarter, causing Vans’ quarterly financial statements to be false. The action goes further to all that the defendants actively concealed that literally millions of dollars worth of Vans’ valuable inventory was worth a fraction of the value claimed.

As a result of the defendants’ false statements, Vans’ stock price traded at inflated levels during the applicable period, increasing to as high as $24.59 on May 31, 2001. During this period, the company and its top officers and directors allegedly sold $60 million worth of Vans shares.

The action alleges that the defendants failed to disclose and indicate: (1) that Vans improperly recognized revenue in violation of Generally Accepted Accounting Principals ("GAAP"); (2) that company accomplished its illegal revenue recognition scheme by sending products to third-party distributors and holding the products there until a buyer could be found; (3) that the defendants entered into this scheme because they knew that its skate parks were losing cash and its sales were falling flat.

On May 23, 2002, Vans announced preliminary results for the fourth quarter and fiscal year ending May 31, 2002, revisions to its guidance for fiscal 2003, plans to close its Bakersfield, California, skate park and take an impairment charge with respect to its Denver, Colorado skate park, and a write-down of certain slow-moving inventory. The market reacted swiftly to the news with shares of Vans falling 19.87% or $2.53 per share to close at $10.20 per share on May 24, 2002.

If you purchased the securities issued by Vans, you may request appointment by the court as a lead plaintiff if you do so by March 23, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.