NEW YORK, MARCH 28, 2003 (PRIMEZONE) -- Wolf Popper LLP has filed a securities fraud class action complaint against King Pharmaceuticals, Inc. (NYSE:KG) and five of its current and former senior officers and directors on behalf of purchasers of King common stock from April 26, 1999 through March 10, 2003, inclusive. A copy of the complaint is available from the U.S. District Court for the Eastern District of Tennessee - Northeastern Division, and on Wolf Popper's website (www.wolfpopper.com).
The plaintiff alleges in the action that King billed Medicaid for prescription pharmaceuticals in amounts in excess of the Medicaid reimbursement to which King was entitled, and reported those excess billings as revenue on its financial statements. Medicaid regulations require that King charge Medicaid its "best price." Defendants effected their fraudulent scheme by failing to reduce that "best price" by the amount of rebates given to King's non-Medicaid customers. Accordingly, King violated federal law with regard to Medicaid reimbursement and inflated its financial statements by reporting revenue that was not actually earned.
The true facts began to be revealed on March 11, 2003 when King announced that the SEC had issued a subpoena for documents relating to the pricing of King's pharmaceutical products to Medicaid. When the truth about King's overstatement of revenues and earnings began to be revealed on March 11, 2003, the Company's common stock fell to $12.17. During the Class Period, King common stock had closed at a high of $46.05 per share.
Defendants engaged in this scheme to raise cash proceeds through a secondary offering, make large acquisitions for stock, and profit individually from insider sales of King common stock. During the Class Period, the individual defendants reaped, in the aggregate, several hundred million dollars in proceeds from their insider sales of King common stock.
Any member of the class who desires to be appointed lead plaintiff in the class action must file a motion with the Court no later than May 12, 2003. 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 in this action, 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 on the Class Action Newsline at www.primezone.com/ca