BATON ROUGE, La., July 12, 2002 (PRIMEZONE) -- A shareholder sued the pharmaceutical firm Merck & Co., Inc. (NYSE:MRK) and several top officers, claiming the company improperly inflated revenues by billions of dollars, LeBlanc & Waddell, LLC said.
The complaint was filed in the U.S. District Court for the District of New Jersey. It seeks damages for violations of federal securities laws on behalf of all investors who bought Merck common stock from July 1, 1999 through June 21, 2002 (the Class Period).
According to the complaint, Merck overstated revenues by billions of dollars from its subsidiary Merck-Medco Managed Care, L.L.C. by including consumer co-payments for prescription drugs in its revenues. During the Class Period, Merck-Medco's revenues made up over 50% of Merck's total revenues. The lawsuit claims that Merck violated Generally Accepted Accounting Principles because neither company bills for the co-payments, gets billed for them, or otherwise comes into contact with co-payment money. Patients make co-payments directly to pharmacies when they purchase medicine.
On June 21, 2002, The Wall Street Journal reported on Merck's accounting practices and estimated that Merck and Merck-Medco may have pumped up their 2001 revenues by as much as $4.6 billion. Similar overstatements may have occurred for 1999 and 2000, the complaint says. That same day, according to the complaint, a Merck spokesman admitted that the company had been recording prescription drug co-payments as revenue since it acquired Merck-Medco in 1993.
In the wake of these revelations, Merck's stock immediately dropped 4.25% from its closing price of $52.20 on June 20, 2002 to a closing price of $49.98 on June 21, 2002, its lowest closing price since late 1997.
If you purchased Merck & Co., Inc. common stock during the period July 1, 1999 through June 21, 2002, you may wish to contact the following attorney at LeBlanc & Waddell LLC to discuss your rights and interests:
Chad A. Dudley, Esq. LeBlanc & Waddell, LLC 5353 Essen Lane, Suite 420 Baton Rouge LA 70809 cdudley@lw-law.net (800) 988-3514
If you wish to apply to be lead plaintiff in this action, a motion must be filed on your behalf with the court no later than August 30, 2002. You may contact the attorneys at LeBlanc & Waddell LLC to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. You may also retain counsel of your choice. To be a member of the class, however, you need not take any action at this time.
With offices in Baton Rouge, New Orleans, Shreveport, Monroe and Slidell, Louisiana, LeBlanc & Waddell, LLC represents investors in securities class action lawsuits and has experience in prosecuting class actions. The firm prides itself on its responsiveness to shareholders and their needs in each case.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.