NEW YORK, Nov. 13, 2002 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Northern District of Ohio on behalf of all purchasers of the common stock of OM Group, Inc. ("OM Group") (NYSE:OMG) publicly traded securities during the period between April 25, 2002 and Oct. 30, 2002, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on Wechsler Harwood website at: http://www.whesq.com.
The action charges OM Group, as well as its Chief Executive and Chief Financial Officers, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The violations, as the complaint alleges, stem from the issuance of allegedly false statements during the Class Period, which had the effect of artificially inflating the price of OM Group securities.
OM Group makes metal-based chemicals used in the aerospace, auto, and electronics industries. On July 30, 2002, the OM Group -- in announcing slightly worse-than-expected 2nd quarter 2002 financial results -- said that results for the 2nd half of 2002 would be adversely affected by low cobalt prices, and guided profit estimates downwards ($0.92 EPS for the third quarter; $3.64 EPS for the full year). During the conference call discussing the 2nd quarter results and the 3rd quarter projections, management repeatedly emphasized that OM Group was operationally excellent, and that its slightly-reduced financial guidance for the rest of the year was merely a function of management's prudent and "conservative picture on cobalt." On September 19, 2002, OM Group warned that 3rdQ 02 results would be slightly lower than previously issued financial guidance. On October 29, 2002, OM Group announced a third quarter loss of $2.52 per share, due to a $108 million write-down of its cobalt inventory (absent the write-down and certain non-recurring earnings, OM Group would have earnings approximately 40% below original guidance).
On October 29, 2002, OM Group shares lost 70% of their value (falling $22 per share to close at $9 per share) after announcing large losses due to a massive inventory write-down, plans for a operational restructuring, and a thorough review of its financial reporting. OM Group shares fell further (to $6 per share) when the company admitted that OM Group's CEO had sold all his holdings to cover a margin call on 710,000 OMG shares which he had used as collateral for a loan.
The complaint alleges that, during the Class Period, OM Group falsely represented its financial results and operational state by failing to take needed inventory write-downs and by failing to inform investors that it was considering significantly altering certain of its (non-performing) operations.
The Plaintiff, represented by Wechsler Harwood, seeks to recover damages on behalf of all purchasers of OM Group publicly traded securities during the Class Period (the "Class"). Wechsler Harwood has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
If you purchased securities during the Class Period, you may, no later than December 31, 2002, move to be appointed as a lead plaintiff in this class action. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Ramon Pinon, Wechsler Harwood Shareholder Relations Department: rpinon@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca