According to a press release dated September 27, 2005, the complaint alleges Spectrum and certain of its former officers and directors violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period.

Specifically, the complaint alleges that throughout the Class Period, defendants were well aware that the Company's growth model depended upon strong and consistent sales of its core battery products, while at the same time acquiring and integrating diversified brands. Accordingly, throughout the Class Period, defendants consistently represented (1) that the Company was growing through acquisitions and diversifying revenues while maintaining sales of existing products and leveraging existing brands; (2) that the combination of Rayovac and United presented a "compelling value proposition"; (3) that management of the Company had an outstanding track record for successfully integrating acquired brands "while maintaining marketplace momentum" of its legacy brands; (4) that defendants were able to drive revenue growth of its core brands by cross selling its legacy products to accounts acquired through acquisitions; (5) that the representations and warranties contained in the United Merger Agreement were true and accurate at all relevant times; (6) that the Company was achieving "record" sales during the Class Period with double-digit increases in battery sales, "exceptional performance" across the board and with integrations proceeding according to plan; and (7) that by the end of the Class Period the integration of United was substantially complete and also proceeding according to plan.

The representations concerning defendants' ability to acquire and integrate diverse brands such as United and Tetra, while maintaining robust sales of its core battery products, were either patently untrue, or Defendants recklessly disregarded the Company's true operational and financial condition. Unbeknownst to investors, throughout the Class Period, the Company suffered from a host of undisclosed adverse factors that negatively impacted its business and caused it to report financial results that were materially less than the market expectations defendants had caused and cultivated.

The complaint further alleges that it was only at the end of the Class Period that investors ultimately learned that the Company was operating far below expectations and realized that Spectrum Brands had significantly inflated sales of its battery products during the 1st and 2nd quarter of 2005. Accordingly, on July 28, 2005, when defendants reported results for the 3rd fiscal quarter of 2005, the price of Spectrum Brands stock declined over $8.00, falling over 20% to closing at $30.10 per share.

The bad news, however, was not over. On September 7, 2005, prior to the market opening, defendants revealed that earnings for the fourth quarter ending September 30, 2005 would be "substantially lower" than the guidance previously reported. Defendants attributed the shortfall to weak sales and "high (retail) inventory levels." The unexpected news prompted additional analyst downgrades. Analyst William Schmitz noted that "(a)fter two earning warnings in six weeks, we believe already low investor faith in this roll-up is likely to dissipate." In response to the September 7, 2005 news, the stock dropped another 13% on volumes of 4.26 million. In total, the stock lost 31% of its value in response to the disclosures.

A similar, purported class action complaint was also filed in the U.S. District Court for the Western District of Wisconsin against Spectrum Brands, Inc. and certain of its officers.

If you bought Spectrum Brands, Inc. securities between January 4, 2005 and September 6, 2005, inclusive, and would like to obtain information about the Spectrum Brands, Inc. lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.