NEW YORK, March 8, 2002 (PRIMEZONE) -- According to Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com), which has filed a class action lawsuit against Global Crossing, Ltd. ("Global Crossing" or the "Company") (NYSE:GX) (OTCBB:GBLXQ) on behalf of all those persons or entities who purchased the securities of Global Crossing during the period between January 2, 2001 through January 30, 2002, inclusive (the "Class Period"), shareholders have until Friday, April 5, 2002, to seek appointment by the Court as one of the lead plaintiffs in this action. The lawsuit was filed in the United States District Court, District of New Jersey under Civil Action Number: 02-CV-643.
The lawsuit charges that defendants issued materially false and misleading statements during the Class Period concerning Global Crossing's financial results. In particular, it is alleged that as a result of these false and misleading statements, Global Crossing's stock was artificially inflated throughout the Class Period causing plaintiff and the other members of the Class to suffer damages. During the Class Period, but prior to the disclosure of the true facts, Company insiders allegedly profited by over $150 million in insider stock sales while knowing the actual condition of the Company.
As alleged in the Complaint, the Company's purported revenue and earnings results were artificially inflated through accounting chicanery in violation of Generally Accepted Accounting Principles ("GAAP"). In essence, the Company entered into twenty to twenty-five year contracts, known as indefeasible right to use ("IRU"), and booked most of that twenty-year revenue up front in one lump sum. At the same time, the Company would purchase similar capacity in another area from the same carrier and then book those costs as a capital expense allowing it to show large revenue increases with little or no operating expenses. Defendants wrongfully failed to disclose such accounting maneuvers to the investing public.
On January 30, 2002, two days after Global Crossing declared bankruptcy, the Wall Street Journal and Los Angles Times reported that during at least 2001, the Company was engaged in barter transactions on which it improperly recognized revenue in violation of GAAP. By February 4, 2002, the Company essentially acknowledged the veracity of the news reports and admitted that a senior officer had informed the Company of these problems as early as August 2001. The SEC and the Federal Bureau of Investigation ("FBI") are also examining the Company. It has now been revealed that the SEC had raised questions regarding the Company's revenue recognition policies as early as July and August 2000. Delisted from the New York Stock Exchange after having declared bankruptcy, Global Crossing shares fell from a Class Period high of $13.80 to a near total collapse in value of $0.125 in over the counter trading.
If you purchased the securities of Global Crossing during the Class Period, you have until Friday April 5, 2002 to ask the Court to appoint you as one of the lead plaintiffs for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca