NEW YORK, August 1, 2003 (PRIMEZONE) -- The law firm of Seeger Weiss LLP announces that a class action lawsuit was filed on August 1, 2003 in the United States District Court for the Southern District of Florida on behalf of all persons who purchased the publicly traded securities of The Singing Machine Company, Inc. ("Singing Machine" or the "Company")(AMEX:SMD), from August 9, 2001 to July 14, 2003, inclusive (the "Class Period"), and who were damaged thereby. A copy of the complaint filed in this action, numbered 03-CV-80714, is available from the Court or by contacting counsel below.
The Singing Machine is engaged in the production and distribution of consumer-oriented karaoke machines. The complaint alleges that defendants Edward Steele, John F. Klecha, April Green, the Company and Salberg & Company (the Company's auditors), violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between August 9, 2001 and May 20, 2003, thereby artificially inflating the price of the Company's securities.
The Complaint alleges that the Company emerged from bankruptcy in 1998, and issued a series of press release announcing "record" net income to create the impression that the Company had profitability emerged from bankruptcy and had successfully completed its corporate turnaround. In response to the Company's announcement, the stock price climbed to $26 per share in March 2002.
On June 27, 2003, the Company announced that it was restating its 2002 financial results and may even restate its 2001 results because its net income for those years was overstated and that the Company was delaying the filing of its Annual Report on Form 10-K for the fiscal year that ended March 31, 2003. In response, the Company's stock fell 33% in price with enormous trading volume. As a result of the defendants' misrepresentations, SMC investors have sustained tremendous losses.
On July 14, 2003, the Company announced that it was restating its financial results for fiscal years 2001 and 2002 and stated that its auditors had expressed "substantial doubt" about the Company's ability to continue as a going concern. In response, the Company stock fell 19% percent to close at $3.03 per share on July 15, 2003.
As now revealed, during the Class Period the defendants issued false and misleading financial statements and press releases concerning the Company's financial results. The Company's financial statements during the Class Period, all of which were implicitly or explicitly represented to have been prepared in conformity with generally accepted accounting principles ("GAAP"), were materially false and misleading because the defendants had caused the Company to materially overstate its net income in its publicly issued financial statements. As a result, the Company's shareholders have sustained tremendous losses.
Plaintiff seeks to recover damages on behalf of all Class members and is represented by the law firm of Seeger Weiss LLP. Seeger Weiss LLP maintains offices in New York City and New Jersey and is active in major complex commercial and securities litigations pending in federal and state courts throughout the United States.
If you are a member of the Class described above, you may, not later than September 1, 2003, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to this matter, please contact plaintiff's counsel listed below.
More information on this and other class actions can be found on theClass Action Newsline at www.primezone.com/ca