A class action has been filed against Tribune Company (NYSE:TRB), certain of its officers and directors by stockholders who purchased the company's common stock between January 24, 2002 and July 15, 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.

The complaint alleges that defendants intentionally overstated the circulation of several of Tribune's publications, including Hoy and Newsday, in order to fraudulently extract higher incentive payments from the papers' advertisers. These inflated circulation numbers were reported to investors and the market on a regular basis and artificially inflated Tribune's financial results.

In June 2004, Tribune reported that two of its papers, Newsday and Spanish-language publication Hoy, had inflated circulation figures since 2001. As alleged in the complaint, this announcement set off a wave of increased scrutiny throughout the publishing industry, with advertisers keen to ensure that they were not being similarly duped. Tribune also came under increased scrutiny with the Audit Bureau of Circulations, a non-profit, private entity charged with monitoring the accuracy of circulation numbers for publications nationwide. As a result of this increasing pressure, Tribune admitted on July 15, 2004 that its reported circulation numbers for Hoy and Newsday were overstated. Tribune eventually announced it was conducting an internal investigation and that it may refund to advertisers all amounts that they had been overcharged. In response to this announcement, Tribune's stock price fell to $41 at the close of business on July 15, 2004, and has never recovered.

According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) since at least FY 2001, defendants were inflating the circulation of Tribune's Hoy and Newsday publications; (b) as a result of said inflation, the Company's financial results during the Class Period were artificially inflated (including revenue, earnings per share ("EPS") and accounts receivables) and the Company's liabilities were understated; (c) the Company's revenue and income was grossly overstated by millions of dollars; (d) defendants had knowingly established extremely weak, if not purposeless, circulation controls which allowed for the circulation overstatements and did not require that circulation managers certify the claimed circulation; and (e) as a result, defendants' ability to continue to achieve future EPS and revenue growth would be severely threatened and would and did result in $95 million in costs, fines, refunds and investigation expenditures.

If you bought Tribune Company securities between January 24, 2002 and July 15, 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.