CLEVELAND, March 2, 2004 (PRIMEZONE) -- Landskroner - Grieco, Ltd. announces that it has filed a securities fraud class action complaint against aaiPharma Inc. (Nasdaq:AAII) ("aaiPharma" or the "Company") and three of its senior officers on behalf of purchasers of AAII securities from April 24, 2002 through and including February 27, 2004. A copy of the Complaint filed in this action can be obtained from the Court. You may also request a copy of the complaint by emailing Jack Landskroner at jack@landskronerlaw.com.
The deadline to file lead plaintiff papers, for those class members wishing to serve in this capacity, is April 13, 2004 . There are certain legal requirements to serve as lead plaintiff, which we would be happy to discuss with you. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Jack Landskroner or Debra Spaller at Landskroner - Grieco, Ltd. by calling toll free at 866-522-9500 or by emailing jack@landskronerlaw.com . The website is: www.landskronerlaw.com .
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges throughout the Class Period, defendants issued quarter after quarter of "record" financial results. Defendants emphasized increased revenues throughout the Class Period, fueled by strong sales of pharmaceutical products. The complaint alleges that Defendants failed to disclose that these stellar financial results were only made possible through improper sales practices, such as "channel stuffing" or flooding wholesalers with products in order to artificially boost sales, and failing to properly account for product returns in violation of Generally Accepted Accounting Principles ("GAAP"). The Complaint also alleges that the Defendants lacked any reasonable basis in fact for the earnings guidance issued on December 12, 2003.
On February 5, 2004, before the market opened, defendants shocked the market by announcing fourth quarter net revenues were reduced by $15.9 million. In response to the news concerning aaiPharma's previously undisclosed inventory issues, the price of aaiPharma stock dropped from over $27 per share on February 4, 2004 to $21.30 on February 5, 2004, a drop of over 23% on unusually large trading volumes of 4.8 million shares traded. The stock continued to drop as the fraudulent nature of the Company's sales and accounting practices came to light, trading at only $20 per share on February 9, 2004. On March 1, before the market opened, aaiPharma announced that it had appointed an independent committee to investigate what the Company has now admitted were "sales abnormalities" or "unusual sales" in the Company's Brethine(r) and Darvoct(tm) product lines during the second half of 2003." The Company also withdrew previously issued first quarter and fiscal year 2004 guidance and admitted that it may have to adjust 2003 results, depending on the outcome of its announced inquiry. In response to the Company's March 1 disclosure, the stock price closed at $9.77 per share, which was $5.51 or over 36% down from the previous day's close.
Landskroner - Grieco, Ltd. is a law firm whose practice areas include securities fraud and consumer class action litigation. Jack Landskroner is a board certified trial advocate by the National Board of Trial Advocacy and has been counsel of record in class action cases litigated across the county. For more information or questions about our pending action against aaiPharma Inc. or about Landskroner - Grieco, Ltd. please contact Jack Landskroner at 866-522-9500 (toll-free), by e-mail at jack@landskronerlaw.com or at 1360 West 9th St., Suite 200, Cleveland, Ohio 44113 or visit its website at: http://www.landskronerlaw.com .