NEW YORK, Nov. 27, 2002 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action lawsuit in the United States District Court for the Southern District of New York against Salomon Smith Barney, Inc. ("Salomon") and its former telecommunications research analyst Jack B. Grubman ("Grubman") on behalf of investors who purchased the securities of Metromedia Fiber Network, Inc. ("Metromedia" or the "Company") (Pink Sheets:MFNXQ) during the period from November 25, 1997 through July 25, 2001, inclusive (the "Class Period"). The lawsuit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading analyst reports on Metromedia, a telecommunications company, in a bid to win or maintain lucrative banking and advisory work from the Company.
The complaint alleges that Salomon and Grubman urged investors to purchase Metromedia stock by issuing false and misleading analyst reports rather than providing independent objective analysis. Salomon initiated coverage of Metromedia on November 25, 1997 at a "Buy," Salomon's highest rating, and continued at that level through July 25, 2002, when Salomon downgraded its rating. However, by that time Metromedia stock was trading at $0.80 per share. Between October 1997 and October 2001, Salomon advised Metromedia on approximately 15 investment banking deals and billed the Company approximately $47 million. As a result of defendants' false and misleading statements, the market price of Metromedia securities was artificially inflated, maintained or stabilized during the Class Period.
On September 30, 2002, New York State Attorney General Eliot Spitzer sued Metromedia Chairman Stephen A. Garofalo ("Garofalo"), along with four other current and former executives of three other telecom companies, for repayment of proceeds realized through "profiteering in Initial Public Offerings ("IPOs") and phony stock ratings." According to the complaint, Garofalo received the first of his 37 hot IPO allocations from Salomon in September 1997, one month prior to Salomon's first banking fee from Metromedia for Salomon's role as a lead manager in the Company's $146 million initial public offering. Garofalo eventually sold the hot IPO shares for a personal profit of approximately $1.5 million.
If you purchased the securities of Metromedia during the Class Period, you have until December 6, 2002 to ask the Court to appoint you as lead plaintiff for the Class. To serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz firm, which has offices in New York and Chicago, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class action litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.