BALA CYNWYD, Pa., July 11, 2002 (PRIMEZONE) -- A pending class action Omnicom Group, Inc. (NYSE:OMC) with misleading investors about its business and financial condition according to the law firm of Schiffrin & Barroway, LLP.
The complaint was filed in the U.S. District Court for the Southern District of New York . Plaintiff seeks damages for violations of the federal securities laws on behalf of all investors who purchased Omnicom Group, Inc. securities between April 25, 2000 through June 11, 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 Omnicom Group, 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 Omnicom Group, Inc. reported that it was continuing to experience growth in its revenues and earnings, despite the overall economic slowdown and the worst decline in advertising revenue that the industry had ever experienced. As alleged in the complaint, Omnicom's growth was attributed, for the most part, to the numerous acquisitions made by the Company, which were accretive to the Company's earnings. However, on June 12, 2002, an article in The Wall Street Journal highlighted the Company's acquisition accounting and raised questions concerning the Company's creation of an off-balance sheet entity in which it transferred certain Internet investments. In particular, with respect to the Company's accounting for acquisitions, the article noted that: (i) Omnicom immediately included revenue and earnings from recent acquisitions in its reported financial results, in contrast to its competitors who excluded the results for the first year after the company was acquired, thereby creating a materially misleading impression of the Company's performance; (ii) that the Company continued to owe hundreds of millions of dollars in additional payments for companies that it had previously acquired; and (iii) the Company faced a potential future liability whereby, under certain circumstances, it might be required to acquire companies in which it had invested. With respect to the off-balance sheet entity, the article described the Company's transfer of its internet investments to Seneca, which had been jointly created with Pegasus Capital LLP in May 2001. According to the article, Seneca had been created as a vehicle for the Company to avoid reporting a loss on its investments in internet companies that had become devalued.
In response to the revelations contained in The Wall Street Journal article, the price of Omnicom common stock dropped precipitously, falling almost 20% to close at $62.28, on volume of more than 31 million shares traded.
If you purchased Omnicom Group, Inc. securities between April 25, 2000 through June 11, 2002, you may be a member of the class and have until August 12, 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 lass Action Newsline at www.primezone.com/ca.