PHILADELPHIA, Dec. 17, 2002 (PRIMEZONE) -- Spector, Roseman & Kodroff, P.C. announces that a class action lawsuit was filed on behalf of purchasers of the securities of Broadwing, Inc. ("Broadwing" or the "Company") (NYSE:BRW) publicly traded securities during the period between January 17, 2001 and May 20, 2002, (the "Class Period"), inclusive.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 17, 2001 and May 20, 2002 thereby artificially inflating the price of Broadwing securities. As alleged in the complaint, Broadwing, together with its consolidated subsidiaries, purported to be a full-service, local and national provider of data and voice communications services. Throughout the Class Period, as alleged in the complaint, defendants represented to investors that Broadwing's business was strong; that it had unique attributes that set it apart from its competitors in the industry and that immunized it from the adverse effects of the industry-wide downturn and related "bandwidth glut"; that the Company was successfully achieving strong financial results and executing on its business plan; and that the Company's goodwill asset was reasonably valued at $2.2 billion.
As alleged in the complaint, these statements were materially false and misleading because they failed to disclose, among other things, that: (a) the Company was not increasing its revenue by winning over new customers with unique and superior service offerings but rather through the use of one-time transactions with other carriers and sham swap transactions that had no economic substance; (b) Broadwing's broadband revenue flow was extraordinarily unreliable because it was derived in large part from its competitors who were themselves vulnerable to the telecommunications industry downturn; and (c) the Company's reported goodwill and shareholder equity were grossly over-valued.
On May 20, 2002, the truth emerged that a material portion of Broadwing's revenue was derived from one-transactions with its competitors. Broadwing's share price plummeted 30% on these reports and related concerns about the quality of Broadwing's revenue reporting and liquidity, to close at $3.70 down $1.58 from the previous days closing price of $5.28.
If you purchased Broadwing securities during the Class Period, you may, no later than December 30, 2002 to move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Broadwing securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@srk-law.com. For more detailed information about the firm please visit its website at http://www.spectorandroseman.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania and San Diego, California, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.