PHILADELPHIA, Aug.5, 2002 (PRIMEZONE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a class action lawsuit has been commenced in the United States District Court for the New Jersey on behalf of purchasers of the stock Merck & Company, Inc. ("Merck") (NYSE:MRK) securities during the period from July 1, 1999 through and including June 21, 2002 (the "Class Period").
The complaint alleges that Merck and certain of its officers and directors violated the federal securities laws. The complaint alleges, among other things, that during the Class Period defendants overstated Merck's revenues. The Company's operations are comprised of two reportable segments: Merck Pharmaceutical and Merck's wholly owned subsidiary, Merck-Medco Managed Care, L.L.C. ("Merck-Medco"). Since Merck acquired Merck-Medco in 1993 and throughout the Class Period, Merck and Merck-Medco have falsely inflated their reported revenues by billions of dollars, in violation of Generally Accepted Accounting Principles ("GAAP"). During the Class Period, Merck-Medco's revenues have made up over 50% of Merck's total revenues. Merck-Medco revenues are purportedly derived from the filling and managing prescriptions and health management programs. Consumers who are members of pharmacy benefits plans and purchase prescriptions must make a co-payment directly to the pharmacy. To artificially boost Merck-Medco's apparent sales, defendants included consumer co-payments for prescription drugs in its revenues, contrary to the revenue recognition practices of two of Merck-Medco's biggest competitors and in violation of GAAP. As a result, Merck-Medco and Merck overstated the companies' total economic activity, making it look more successful than it was in reality.
According to a June 21, 2002 article in The Wall Street Journal, neither company bills for the co-payments, gets billed for them, or otherwise comes into contact with them. The Wall Street Journal reported that Merck has not disclosed the actual co-payments charged and estimated that Merck and Merck-Medco may have artificially inflated their 2001 revenues by as much as $4.6 billion.
As a result of Defendants' false and misleading statements, investors were damaged by purchasing Merck's common stock at artificially inflated levels during the Class Period.
If you purchased Merck securities during the Class Period, you may, no later than August 30, 2002, 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 Merck 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 join this action, please visit http://www.srk-law.com/dbjoinaclassaction.asp. To discuss this notice, 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 our 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.