PHILADELPHIA, Feb. 13, 2001 (PRIMEZONE) -- Counsel for Class Plaintiff, Barrack, Rodos & Bacine, today issued the following: A class action has been commenced in the United States District Court for the Eastern District of Oklahoma on behalf of all persons who purchased the securities of Pre-Paid Legal Services, Inc. (NYSE:PPD) ("Pre-Paid" or the "Company") (PPD) between April 19, 1999, and January 16, 2001, inclusive (the "Class Period").
To sign-up online: http://www.barrack.com/NewCases/NewCases.htm.
Pre-Paid underwrites and markets legal service plans that provide for or reimburse a portion of legal fees incurred by members in connection with specified matters. The Company's legal expense plans provide for or reimburse a portion of the legal fees associated with a variety of legal services in a manner similar to medical reimbursement plans. Pre-Paid utilized a multi-level marketing system to sell its policies.
The complaint charges Pre-Paid and certain of its officers with violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by continually announcing favorable earnings and growth in the number of "associates" who sold its policies, when, in fact, many of its associates were no longer generating new business and were not repaying advances from the Company, and that the Company's earnings were manipulated and overstated by improperly capitalizing commission expenses and failing to write off uncollectible advances. As a result, Pre-Paid's stock traded at inflated levels during the Class Period, increasing to as high as $48.75 per share. Then on January 17, 2001, The Wall Street Journal published a story on Pre-Paid's accounting, which began to expose the scheme. Upon these disclosures, Pre-Paid stock dropped to $20 per share.
The plaintiff seeks to recover damages on behalf of all purchasers of Pre-Paid securities during the Class Period. He is represented by the law firm of Barrack, Rodos & Bacine, which has extensive experience in prosecuting investor class actions involving financial fraud. Barrack, Rodos & Bacine has prosecuted securities, antitrust and consumer class actions for over 20 years. The firm has offices in Philadelphia, San Diego, New York, Boston and New Jersey and has been designated lead counsel by federal and state courts across the country in large, complex securities class actions, including those against Cendant Corp. (the largest securities class action in United States history), McKesson HBOC, Inc., Informix Corporation, Sunbeam Corporation and hundreds of others. For more information about Barrack, Rodos & Bacine, please visit their website at www.barrack.com.
If you are a member of the Class described above, you may, no later than March 23, 2001, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this case or your rights or interests, please contact Maxine S. Goldman, Shareholder Relations Manager, at Barrack, Rodos & Bacine, 3300 Two Commerce Square, 2001 Market Street, Philadelphia, PA 19103, at 800-417-7305 or 215-963-0600, fax number 888-417-7306 or 215-963-0838 or by e-mail at msgoldman@barrack.com.
More information on this and other class actions can be found at www.primezone.com/ca