NEW YORK, May 1, 2006 (PRIMEZONE) -- Abbey Spanier Rodd Abrams & Paradis, LLP commenced a class action lawsuit in the United States District Court for the Middle District of Florida (Case No. 6:06-cv-587) on behalf of a class (the "Class") of all persons who purchased or acquired securities of PainCare Holdings Inc. ("PainCare" or the "Company") (AMEX:PRZ) between August 27, 2002 and March 15, 2006 inclusive (the "Class Period").
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 during the Class Period thereby artificially inflating the price of PainCare securities. Defendants include PainCare, Randy Lubinksy and Mark Szporka.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. On March 15, 2006, the Company announced that, as a result of on-going discussions with the SEC concerning accounting irregularities, it will restate all of its historical financial statements for the years ended December 31, 2000, December 31, 2001, December 31, 2002, December 31, 2003 and December 31, 2004, and the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005. On this news, PainCare's stock plunged to as low as $2.50 per share on the first day of trading following the announcement.
According to the complaint, the true facts, which were known or recklessly disregarded by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Defendants knew or recklessly disregarded material adverse information about the Company's financial results and then existing business condition; (b) as a result, the Company's projections and reported results were based upon defective assumptions and/or manipulated facts; and (c) the Company's financial statements were materially misstated due to the fact that PainCare failed to properly account for expenses and consistently overstated earnings.
The Complaint alleges that defendants engaged in improper accounting practices in order to bolster PainCare's stock price, thereby enabling the Company to complete numerous acquisitions of related pain care companies during the Class Period. More specifically, the Complaint alleges that defendants directly participated in an accounting fraud, which materially overstated the Company's financial results in violation of Generally Accepted Accounting Principles ("GAAP"). Defendants materially overstated PainCare's financial results by improperly accounting for its numerous acquisitions and certain other non-cash expenses. As a result of these violations, the Company is now forced to restate its financial results for fiscal years 2000 through 2005.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired PainCare securities during the Class Period. If you purchased or otherwise acquired PainCare securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased PainCare securities during the Class Period, you may, no later than May 19, 2006 request that the Court appoint you as lead plaintiff.
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 plaintiffs.'' Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Abbey Spanier Rodd Abrams & Paradis, LLP has been retained to represent the Class. The attorneys at Abbey Spanier Rodd Abrams & Paradis, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of over one billion dollars for investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact:
Nancy Kaboolian, Esq. or Susan Lee Abbey Spanier Rodd Abrams & Paradis, LLP 212 East 39th Street New York, New York 10016 (212) 889-3700 (800) 889-3701 (Toll Free) Or e-mail slee@abbeyspanier.com