LITTLE ROCK, Ark., May 16, 2002 (PRIMEZONE) -- The Emerson Firm, a securities class action law firm with offices in Houston, Texas and Little Rock, Arkansas, announced today that a class action has been filed in the United States District Court for the Northern District of California on behalf of purchasers of VeriSign Inc. (Nasdaq:VRSN) ("VeriSign" or the "Company") common stock during the period between January 25, 2001 and April 25, 2002, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be obtained from the firm's Investor relations Department.
The complaint charges VeriSign and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company provides digital trust services that enable Web site owners, enterprises, communications service providers, e-commerce service providers and individuals to engage in secure digital commerce and communications.
The complaint alleges that during the Class Period, defendants sought to artificially increase the Company's revenue and margins and to create the perception that its deferred revenue growth was derived organically. In fact, approximately 10% of the Company's revenue was derived from sales to small companies in which VeriSign had invested and from dubious "barter transactions."
VeriSign's revenues and earnings derived from related parties were dubious at best. Specifically, whenever a two-way set of transactions occurs in which a company acts as both the lender and service provider, an investor laces assurance as to whether the related parties would have made similar decisions regarding purchases in the absence of financing from that company. Accordingly, despite the Company's claims that such transactions were separately negotiated and recorded at terms the Company considered to be at arm's length and fair value, the revenue and earnings that VeriSign recognized from its relationship with these customers was not an accurate measure of the "real" demand for VeriSign's products. Equally dubious was the quality of the non-monetary portion of revenue recorded from reciprocal agreements.
As part of their effort to boost the price of VeriSign stock, defendants misrepresented VeriSign's true prospects in an effort to conceal VeriSign's improper acts until they were able to sell at least $26 million worth of their own VeriSign stock and use VeriSign's shares to acquire companies in stock- for-stock transactions. In order to overstate revenues and assets, VeriSign violated Generally Accepted Accounting Principles and SEC rules by, among other things, engaging in improper barter transactions and affiliate sales. These transactions had the effect of dramatically overstating the Company's margins and financial statements. On the Company's partial disclosures on April 25, 2002, the Company's shares plummeted by more than 50%.
If you bought VeriSign common stock between January 25, 2001 and April 25, 2002, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than July 8, 2002. Any member of the purported class may move the Court to serve as lead plaintiff through The Emerson Firm or other counsel of their choice.
The Emerson Firm has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Texas and Arkansas, but represents investors throughout the nation. 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 toll free or e-mail the Firm.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.
The Emerson Firm Tanya Autry, Investor Relations Department (800) 663-9817