BALA CYNWYD, Pa., Aug. 9, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of American Express Co. ("American Express" or the "Company") (NYSE:AXP) between July 26, 1999 and July 17, 2001, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges American Express Co. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that, throughout the Class Period, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's increasing earnings and financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that American Express had made disproportionately large investments in certain speculative high-yield securities. Indeed, in 1997 and 1998, the Company increased its investments in high-yield securities to 10-12% of its portfolio of investments, well beyond the industry norm of 7%; (ii) that the Company's increased investments in certain speculative high-yield securities exposed the Company's investment portfolio to substantial risk in the event default rates in the junk bond market increased; (iii) that the Company lacked the internal controls necessary to monitor its portfolio of high-yield securities such that it was unable to take decisive action should its investments turn against it; and (iv) that as a result of the foregoing, defendants' statements concerning the Company's financial performance and future prospects were materially false and misleading at all relevant times.
On July 18, 2001, before the market opened for trading, American Express issued a press release announcing that its earnings for the second quarter of 2001, the period ending June 30, 2001, would most likely decline 76% from its earnings in the same period of the prior year, in part, because of an $826 million pre-tax charge to recognize, "additional write-downs in the high-yield portfolio at American Express Financial Advisors (AEFA) and losses associated with rebalancing the portfolio towards lower-risk securities." In a conference call following this announcement, defendant Chenault explained that the Company had increased its investments in high-risk junk bonds in 1997 and 1998 to between 10% and 12% of its portfolio and would now be scaling it back to 7%, which is the industry average.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, which prosecutes class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, or to sign-up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than September 16, 2002, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at http://www.primezone.com/ca