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Case ID: 4291 | Stocks | 05/25/2005
A class action has been filed against FindWhat.com , certain of its officers and directors by stockholders who purchased the company's common stock between January 05, 2004 and May 04, 2005. 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 May 6, 2005, the complaint charges Defendants with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that Defendants issued, or caused to be issued, false and misleading statements during the Class Period to artificially inflate the value of FindWhat.com stock. Beginning on January 5, 2004, with the completion of the first in a series of mergers and acquisitions by the Company in 2004, the Company began to accrue intangible assets in excess of their actual value. In violation of Generally Accepted Accounting Principals ("GAAP"), the Company disagreed with its outside auditor, Ernst & Young LLP, with respect to the need to recognize an impairment of its goodwill in connection with the Company's 2004 consolidated financial statements. As a result of the dispute, on May 2, 2005, Ernst & Young LLP resigned. Ernst & Young LLP also informed the Company of six material weaknesses in the Company's system of internal control over financial reporting, and these matters relate to (i) purchase accounting, (ii) goodwill impairment, (iii) revenue recognition for private label agreements and other revenue agreements, excluding those related to FindWhat.com Network revenue, (iv) personnel resources and technical accounting expertise, (v) quarterly and year-end financial statement close and review process, and (vi) segregation of duties. On May 4, 2005, the Company surprised the market with the announcement of the resignation of its CFO. As a result of these disclosures, during the class period, Defendants and other Company insiders knew, or recklessly disregarded the Company's inadequate internal control problems to facilitate the false impression of financial success to investors. While Defendants had misled the investing public and inflated the value of FindWhat.com's stock during the class period, insiders sold 680,959 shares for personal proceeds of $11,320.179. Immediately following both of these disclosures, the Company's stock plummeted, losing $2.04 per share, or 26% of its value on May 3 and an additional $2.33 per share, or an astonishing 38% on May 5, 2005. If you bought FindWhat.com securities between January 05, 2004 and May 04, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action lawsuit has been filed in US District Court against insurance giant Chubb Corporation. The case involves violations of federal securities law. No additional information about the substance of the allegations is available at this time. Classactionamerica.com will monitor this case and provide additional details as soon as they become available. A class action has been filed in the Northern District Court of Illinois against Office Max Inc, (NYSE:OMX) a multinational contract and retail distributor of office supplies, paper, technology products and office furniture, and certain of its officers and directors by stockholders who purchased the company's common stock between November 9, 2004 and January 11, 2005. 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. A class action has been filed against GrafTech International Limited (GTI), certain of its officers and directors by stockholders who purchased the company's common stock between November 3, 2005 and February 8, 2006. 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. Several class actions have been filed against e-messaging protection and transaction services provider Zix Corporation (Nasdaq:ZIXI) and certain of its officers and directors by stockholders who purchased the company's common stock between October 30, 2003, and May 4, 2004. 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. A class action has been filed against Sourcecorp Inc. (Nasdaq: SRCP) and certain of its officers and directors by stockholders who purchased the company's common stock between May 7, 2003 and October 27, 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 stockholder seeks to recover compensatory damages for the loss of value of their stock. A class action has been filed against Terayon Communication Systems, Inc. (TERN), certain of its officers and directors by stockholders who purchased the company's common stock between October 28, 2004 and March 1, 2006. 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. |
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