A class action has been filed against LeapFrog Enterprises, Inc. (NYSE:LF), certain of its officers and directors by stockholders who purchased the company's common stock between February 11, 2004 and October 18, 2004. 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.

According to a press release dated April 28, 2005, the complaint charges LeapFrog and certain of its officers and directors with violations of the Securities Exchange Act of 1934 resulting from defendants' false and misleading statements and omissions, which artificially inflated the price of LeapFrog's stock during the Class Period, causing harm to LeapFrog's investors.

The Complaint alleges that throughout the Class Period, defendants continually assured investors that LeapFrog had taken the necessary steps to correct the problems in its IT systems and supply chain infrastructure (and that these efforts had been successful) and misrepresented and/or failed to disclose that: (i) the Company had not in fact materially improved either its IT systems or its supply chain infrastructure; and (ii) these issues were continuing to have a materially negative effect on its business and on its ability to accurately forecast results and meet analysts' sales and earnings expectations.

The Complaint claims that on October 18, 2004, LeapFrog announced that its 2004 earnings would miss its estimates by more than 60% due, in large part, to its failure to correct the IT and supply chain problems it said it had taken steps to correct. The announcement prompted a large sell-off of LeapFrog shares, which fell 34% in a single day, to a then all-time low of $11.99. Since then, LeapFrog has also missed fourth quarter estimates by a wide margin and replaced three members of its senior management, including its Chief Financial Officer and Chief Operating Officer.

If you bought LeapFrog Enterprises, Inc. securities between February 11, 2004 and October 18, 2004, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.