The actions allege that, beginning as early as 2003, the defendants initiated and engaged in a scheme to defraud businesses that advertise in The Dallas Morning News. The defendants allegedly overstated the paper’s circulation in order to extract higher advertising revenues from the advertisers. These allegedly inflated circulation numbers were reported to the market on a regular basis and the ill-gotten gains from the scheme artificially inflated Belo’s financial results.

The defendants’ scheme, by artificially inflating the value of Belo’s stock, allegedly cheated investors as well. According to the lawsuits, the scheme involved creating an incentive program for third-party vendors who sold The Dallas Morning News to the public-- the more newspapers these vendors claimed to have to sold to the public, the larger the incentive payment they received. Dallas Morning News circulation managers are tasked with monitoring the paper’s circulation program for abuse-- to facilitate the fraudulent reporting, the defendants allegedly created an incentive program for the circulation managers as well. By tying the circulation managers’ incentives to excessive circulation numbers, the defendants influenced the managers to turn a blind eye to the scheme.

On August 5, 2004, Belo reported that its circulation numbers for The Dallas Morning News were overstated by 1.5% for the daily paper, and 5% for the Sunday paper. Belo also announced the resignation of defendant Barry Peckham, the Executive Vice President in charge of circulation at The Dallas Morning News. Belo announced it was conducting an internal investigation and that it would refund to advertisers all amounts that they had been overcharged. In response to this announcement, Belo’s stock price plummeted from $23.21 at the close of business on August 5, 2004, to a low of $18 the next day before finally settling at $21.55, on unprecedented volume of over 4.6 million shares traded.

If you purchased securities issued by Belo Corporation during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 22, 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 plaintiffs. 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 you in this action, or you may choose to do nothing, and remain in the class as a silent member.