NEW YORK, Dec. 20, 2005 (PRIMEZONE) -- The New York law firm of Wechsler Harwood LLP today announced that it has commenced an investigation into Diebold, Inc. ("Diebold" or the "Company") (NYSE:DBD) for violations of the Employee Retirement Income Security Act of 1974 ("ERISA") in relation to its handling of investments in the Diebold, Incorporated 401(k) Savings Plan (the "Plan").
In particular, the investigation focuses on whether the Company and certain Plan administrators breached their fiduciary duties by, among other things: (a) negligently misrepresenting and negligently failing to disclose material facts to the Plan and the Plan participants in connection with the management of the Plan's assets; (b) failing to properly monitor Plan fiduciaries; and (c) negligently permitting the Plan to purchase and hold Diebold stock when it was imprudent to do so.
Diebold is primarily engaged in the manufacture, sale, installation and service of automated self-service transaction systems, electronic and physical security products, election systems and software. The material facts being investigated include, but are not limited to allegations that the Company issued false statements about its business, products, financial results and prospects which caused the Company's stock to trade at artificially inflated levels. On September 21, 2005, before the market opened, the Company announced it was "lowering its third quarter and full-year earnings per share guidance for 2005." Upon release of this news, the Company's stock plummeted to $37.27 per share on volume of 6.1 million shares. Diebold's CEO and Chairman subsequently resigned.
According to a recent class action lawsuit filed in the United States District Court for the Southern District of Ohio against the Company and certain of its senior officers and directors for violations of the Securities Exchange Act of 1934, defendants were aware of but concealed from the investing public that: (a) Diebold's financial statements in 2004 and the first two quarters of 2005 were misstated due to its improper accounting for commission expenses; (b) the Company's internal controls were woefully deficient; (c) Diebold was losing market share in North America to NCR such that its ATM business would not be nearly as favorable in 2005 as the market had been led to believe; (d) Diebold's election machines continued to have severe problems that would hurt the Company in the future due to adverse publicity and reduced sales; and (e) due to these problems, the Company was not on track to report the favorable 2005 EPS being projected for the Company.
Wechsler Harwood has taken a leading role in many significant actions on behalf of current and former employees who have suffered losses in their employer-sponsored retirement accounts due to breaches of fiduciary duties owed to them. The firm devotes a large part of its practice to pursuing such claims as well as claims by defrauded investors and consumers. Recently, the firm served as Co-Lead Counsel in an ERISA class action against Royal Dutch/Shell plc which resulted in a recovery of over $90 million for the class. If you wish to discuss this matter with an attorney or have any information or questions concerning this notice or your legal rights as a Plan participant, you may e-mail or call Wechsler Harwood. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. For more information, please contact the following:
Wechsler Harwood LLP Jeffrey M. Norton, Esq. 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 (ext. 286) e-mail to jmn@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca