BATON ROUGE, July 11, 2002 (PRIMEZONE) -- Shareholders sued Edison Schools, Inc. (Nasdaq:EDSN) and three top officers on May 22, 2002, the company pumped up its stock price by improperly reporting revenue, LeBlanc & Waddell LLC said.
The complaint was filed in the U.S. District Court for the Southern District of New York. It seeks damages for violations of federal securities laws on behalf of all investors who bought Edison Schools common stock from November 11, 1999 through May 14, 2002 (the Class Period).
According to the complaint, Edison Schools, a private operator of public schools, misled investors by releasing false financial information about its earnings.
The complaint alleges that throughout the Class Period, Edison Schools issued numerous quarterly press releases and filings with the Securities and Exchange Commission (SEC) reporting the company's supposedly growing revenue stream. These figures were materially false and misleading, the complaint says, because Edison Schools improperly recognized as revenue money paid for teacher salaries, student transportation, and utility bills. In fact, the company never received the money because it was remitted directly to Edison's "clients," namely local school districts and charter school boards.
The lawsuit also claims that despite significant shareholder losses during the Class Period, Edison Schools' President and CEO paid himself more than $5 million annually and in one year alone cashed out stock options in excess of $15 million. According to the complaint, other top executives sold blocks of Edison Schools stock worth at least $5.5 million each.
On May 14, 2002, Edison Schools announced that it had been the subject of an SEC investigation and has entered into a settlement with the SEC under which it agreed to reclassify the revenues the company had reported for numerous quarters. That day, Edison stock closed at $2.94 per share, down significantly from a Class Period high of $36.75.
If you purchased Edison Schools, Inc. common stock during the period from November 11, 1999 through May 14, 2002, you may wish to contact the following attorneys 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 July 15, 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.