BALA CYNWYD, Pa., June 5, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
A securities class action lawsuit pending in the U.S. District Court for the Northern District of California ((c)-02-2271) claims that VeriSign Inc. ("VeriSign") (Nasdaq:VRSN) misled shareholders about its business and financial condition.
Plaintiff seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and/or the Securities Act of 1933) on behalf of all investors who bought VeriSign Inc. securities between January 25, 2001 through April 25, 2002 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of VeriSign Inc. and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our website at http://www.sbclasslaw.com/cgi/signup.cgi.
The complaint alleges that the California-based VeriSign Inc., during the Class Period, defendants sought to artificially increase the Company's revenue and margins and to create the perception that its deferred revenue growth was derived organically. In fact, approximately 10% of the Company's revenue was derived from sales to small companies in which VeriSign had invested and from dubious "barter transactions".
VeriSign's revenues and earnings derived from related parties were dubious at best. Specifically, whenever a two-way set of transactions occurs in which a company acts as both the lender and service provider, an investor lacks assurance as to whether the related parties would have made similar decisions regarding purchases in the absence of financing from that company. Accordingly, despite the Company's claims that such transactions were separately negotiated and recorded at terms the Company considered to be at arm's length and fair value, the revenue and earnings that VeriSign recognized from its relationship with these customers was not an accurate measure of the "real" demand for VeriSign's products. Equally dubious was the quality of the non-monetary portion of revenue recorded from reciprocal agreements.
As part of their effort to boost the price of VeriSign stock, defendants misrepresented VeriSign's true prospects in an effort to conceal VeriSign's improper acts until they were able to sell at least $26 million worth of their own VeriSign stock and use VeriSign's shares to acquire companies in stock-for-stock transactions. In order to overstate revenues and assets, VeriSign violated Generally Accepted Accounting Principles and SEC rules by, among other things, engaging in improper barter transactions and affiliate sales. These transactions had the effect of dramatically overstating the Company's margins and financial statements. On the Company's partial disclosures on April 25, 2002, the Company's shares plummeted by more than 50%.
If you purchased VeriSign, Inc. securities between January 25, 2001 through April 25, 2002, you may be a member of the class and have until July 8, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at http://www.primezone.com/ca