NEW YORK, Oct. 2, 2002 (PRIMEZONE) -- Wolf Popper LLP has filed a securities fraud class action complaint against Electronic Data Systems Corp. (NYSE:EDS) and two of its senior officers on behalf of purchasers of EDS convertible preferred stock and other securities from April 22, 2002 through September 18, 2002, inclusive. A copy of the complaint is available from the U.S. District Court for the Eastern District of Texas, Sherman Division, and on Wolf Popper's website (www.wolfpopper.com).
Plaintiff alleges in the class action that during the class period (April 22, 2002 through September 18, 2002) defendants (a) falsely portrayed the Company as performing well, when the economic downturn had severely and negatively impacted EDS's business and had caused substantial declines in customer-spending and new contract signings and the renegotiation of terms of existing contracts; (b) improperly recognized revenue from certain large contracts in violation of generally accepted accounting principles; (c) disseminated false and misleading statements about EDS's free cash flow and ability to procure large contracts; and (d) failed to disclose the negative exposure related to derivative stock instruments. As a result of the defendants' misrepresentations, the market prices of EDS securities were artificially inflated during the class period.
The true facts began to be disclosed on September 18, 2002 when EDS announced that its revenue, earnings and cash flow for the third and fourth quarters of 2002 would be substantially lower than it had led investors to believe just a few weeks earlier. EDS's shocking announcement caused its common stock to plummet by $19.26 per share or 53% to close at $17.20 per share on September 19, 2002, hitting a 11-year low and wiping out about $9.2 billion of shareholders' equity. Further, when it was subsequently revealed that EDS's liquidity and cash flow would be adversely impacted by about $225 million due to the Company's liability under certain derivative instruments, EDS common stock sank further on September 24, 2002, dropping by $3.42 per share or 22.6% to close at $11.68 per share.
Any member of the class (who purchased EDS convertible preferred stock or other securities during the period April 22, 2002 through September 18, 2002) who desires to be appointed lead plaintiff in the class action must file a motion with the Court no later than November 25, 2002. Class members must meet certain legal requirements to serve as a lead plaintiff. If you have questions or information regarding this action, or if you are interested in serving as a lead plaintiff, you may call or write:
Wolf Popper LLP, Robert C. Finkel, Esq. 845 Third Avenue, New York, NY 10022-6689
Tel.: 212.451.9620, Toll Free: 877.370.7703; Fax: 212.486.2093, Toll Free: 877.370.7704
Email: irrep@wolfpopper.com; website: www.wolfpopper.com
More information on this and other class actions can be found at the Class Action Newsline at www.primezone.com/ca