BALA CYNWYD, Pa., Feb. 5, 2002 (PRIMEZONE) -- A pending class action charges Homestore.com, Inc. ("Homestore") (Nasdaq:HOMS) with misleading investors about its business and financial condition according to the law firm of Schiffrin & Barroway, LLP.
The complaint was filed in the U.S. District Court for the Central District of California (02-00136). Plaintiff seeks damages for violations of the federal securities laws on behalf of all investors who purchased Homestore.com, Inc. securities between May 4, 2000 and December 21, 2001 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of [INSERT COMPANY NAME] and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our website at www.sbclasslaw.com.
The complaint alleges that the California-based Homestore.com, Inc. provides an online marketplace for home and real estate-related information, products and services. On July 19, 2000 (after the close of the market), Homestore issued a release of its positive 2Q 00 results, causing Homestore's stock price to soar by more than $7 (or 25%) the following trading day.
The complaint alleges that as part of their effort to boost the price of Homestore stock, defendants misrepresented Homestore's true prospects in an effort to conceal Homestore's improper acts until they were able to sell at least $16 million of their own Homestore stock.
In order to overstate revenues and assets in 2Q 00, 3Q 00, 4Q 00, 1Q 01, 2Q 01 and 3Q 01, Homestore violated Generally Accepted Accounting Principles and SEC rules by engaging in improper "round trip" transactions. These transactions had the effect of dramatically overstating revenues and assets. This came to an end (though unbeknownst to the public) in the Company's 3Q 01 as the Company's main round trip partner stopped doing these transactions with the Company.
Following the release of the Company's 3Q 01 results, the Company also slashed its revenue projections for 2002 from $563 million to $375-$425 million as a result of a material decline in its business with its main "round trip" partner. On this news the Company's shares dropped by more than 50% the following trading day. Then, on December 21, 2001 (after the close of the market), the Company partially admitted that its past accounting for its prior results was inaccurate. On this news the Company's shares were halted and have not traded since.
If you purchased Homestore.com, Inc securities between May 4, 2000 and December 21, 2001, you may be a member of the class and have until February 25, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca