NEW YORK, June 2, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit on behalf of shareholders who purchased or otherwise acquired the securities of Xybernaut Corporation (XYBR) ("Xybernaut" or the "Company"; (Pink Sheets:XYBR) between May 10, 2002 and April 8, 2005, inclusive (the "Class Period").
If you purchased or otherwise acquired Xybernaut securities on any world exchange between May 10, 2002 and April 8, 2005, and sustained damages, you may, no later than June 14, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp.
The complaint alleges that during the Class Period defendants issued materially false and misleading financial statements to the investing public regarding its financial performance, financial condition and internal controls in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b 5 promulgated thereunder.
Xybernaut develops, markets and sales mobile/wearable computing and communication systems. During the Class Period, defendants made numerous positive statements in press releases and filings with the SEC concerning the Company's financial performance and future prospects. On March 31, 2005, after the close of trading, Xybernaut announced that it was commencing an internal investigation of the Company's internal controls, the propriety of certain expenditures of the Chairman and CEO of the Company, the Company's public disclosure process, the accuracy of certain public disclosures, management's conduct in response to the investigation, and the propriety of certain major transactions. The press release further stated that the Company had received a subpoena from the Securities and Exchange Commission seeking information relating to the sale of Company securities by any person identified as a selling shareholder in any Company registration statement or other public filing.
After the close of trading on April 8, 2005, Xybernaut issued a press release announcing directing investors to refrain from relying on the Company's financial statements issued for the years ended December 31, 2002 and 2003 covering the 2002 and 2003 annual periods and interim quarterly reports for the quarters ended March 31, 2003, June 30, 2003, September 30, 2003, March 31, 2004, June 30, 2004 and September 30, 2004. Subsequent to these disclosures, both the Company's CEO and President have been removed, an investigation has been initiated by the U.S. Attorney for the Eastern District of Virginia, and the Company's stock has been de-listed by Nasdaq.
On April 19, 2005, Xybernaut announced the completion of its internal investigation. Among other findings, the committee in charge of the investigation found that the Company's Chairman and CEO, Edward G. Newman ("Newman"), improperly used substantial Company funds for personal expenses, that Newman violated internal policies by implementing a systematic policy of nepotism and violated disclosure regulations of the SEC by failing to disclose the Company's employment of certain relatives of Newman, and that the Company lacked adequate internal controls concerning public disclosures and the execution of major transactions.
The Complaint alleges that the systematic failures resulted in the Company issuing statements concerning its financial performance and business outlook that were materially false and misleading and materially overstated the Company's financial performance and financial condition.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Christopher S. Hinton of Murray, Frank & Sailer LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca