NEW YORK, May 21, 2004 (PRIMEZONE) -- The Law Firm of Geller Rudman, PLLC announced today that a class action lawsuit has been filed in the United States District Court for the Southern District of Florida on behalf of purchasers of MasTec, Inc. ("MasTec" or the "Company") (NYSE:MTZ) publicly traded securities during the period between May 13, 2003 and April 12, 2004, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.geller-rudman.com/view_case.asp?cID=273.
The complaint charges MasTec, Austin Shanfelter, and Donald Weinstein with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Complaint alleges that defendants made material misstatements with respect to the Company's financial results. More specifically, the Complaint alleges that defendants failed to disclose and indicate the following: (1) that the Company was materially inflating its financial results; (2) that the Company was prematurely recognizing revenue on various contracts; (3) that the Company's practice of improperly recognizing revenue was in violation of Generally Accepted Accounting Principles ("GAAP"); (4) that the Company overstated its inventory; (5) that the Company failed to have adequate reserves for bad debts, inventory, cost overruns, and projected losses on certain projects; and (6) as a result, the Company's financial results were materially inflated at all relevant times.
The truth about the Company's inflated financial results began to emerge on March 10, 2004, when MasTec announced that the filing of its 10-K would be delayed past the March 15th deadline. On news of this shares of MasTec fell $2.00 per share or 16.75 percent on March 10, 2004 to close at $9.94 per share. On March 18, 2004, MasTec further declined $2.31 per share, or 23 percent, to close at $7.75 per share when Standard & Poor's Rating Services put the Company's BB credit rating on watch for a downgrade.
Then on April 13, 2004, MasTec announced its 2003 operating results and disclosed material problems that may result in a restatement of its previously announced financial results. More specifically, the Company announced a net loss of $39.7 million ($0.83 per share) on revenue of $873.9 million for the year. Additionally, the Company disclosed that during its review and analysis of the Company's annual results, MasTec's management identified a number of matters that impacted current and prior-period operating results. These included additional reserves for bad debts and inventory, cost overruns and projected losses on certain projects, valuation reserves for state deferred tax assets, revenues recognized on various contracts, work in progress and inventory overstatements at a Canadian subsidiary, the closing of Brazilian operations, the accrual for certain insurance reserves which was complicated by the receivership of a prior insurance carrier, and other items. Defendants concluded that these matters required a detailed analysis and evaluation to determine the appropriate accounting treatment. Some of these issues may require restatements of amounts previously reported.
News of this shocked the market. Shares of MasTec's stock price dropped $1.50 per share, or 15.5 percent, on April 13, 2004 on unusually large trading volumes.
If you bought MasTec publicly traded securities between May 13, 2003 and April 12, 2004, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than June 14, 2004. If you are a member of this class, you can join this class action online at http://www.geller-rudman.com. Any member of the purported class may move the Court to serve as lead plaintiff through Geller Rudman or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Geller Rudman, PLLC is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premier firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Geller Rudman, PLLC has grown to become one of the most respected and successful firms representing investors and consumers in class action litigation. The firm came of age under the client focused realities of the Private Securities Litigation Reform Act of 1995, which provided new opportunities for institutional investors to assume leadership in combating securities fraud.
The firm's lawyers have achieved substantial recoveries for aggrieved investors and consumers in class action lawsuits prosecuted in state and federal courts throughout the nation. Geller Rudman, PLLC maintains a widely recognized reputation for excellence, as courts have repeatedly appointed the firm to major positions in intricate multi-district or consolidated litigations. In this regard, Geller Rudman, PLLC has successfully pursued hundreds of class action lawsuits, has taken a lead role in numerous complex litigations on behalf of defrauded investors and consumers and has been responsible for billions in recoveries as well as landmark corporate governance changes. The firm maintains offices in Boca Raton and New York.
If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.geller-rudman.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca