PHILADELPHIA, March 7, 2001 (PRIMEZONE) -- The law firm of Berger & Montague, P.C. (http://www.investorprotect.com) filed a class action in the United States District Court for the Western District of Oklahoma on behalf of all persons or entities who purchased Pre-Paid Legal Services, Inc. ("Pre-Paid Legal") (NYSE:PPD) securities during the period from April 19, 1999, through Jan. 16, 2001, inclusive.
Pre-Paid Legal develops, underwrites and markets legal expense plans. During the Class Period, Pre-Paid Legal engaged in wrongful practices, including its accounting for commissions earned by its employees, which caused Pre-Paid Legal's earnings, income and stock price to be artificially inflated. Some of the undisclosed consequences of the Company's commission policy are:
• the Company is exposed to the risk of uncollectible commission
• the Company's earnings are artificially inflated because the
commissions are treated as assets rather than as expenses;
• the Company capitalizes its commission expenses over too long a
period of time;
Pre-Paid has not written-off any of the associates' receivables;
and
• the Company does not reclassify and disclose the nature of the
receivables.
The defendants' intention was to create an impression of growth and to hide a ticking time bomb of declining growth. Defendants understood the economic reality of the Company's situation and did everything in their power to try to prevent the revelation of their true financial status.
The complaint charges Pre-Paid Legal and two of its highest officers with violations of Sections 10 and 20(a) of the Securities and Exchange Act of l934 for improper accounting practices and materially false and misleading statements in its public statements and filings with the SEC.
If you purchased Pre-Paid Legal securities during the period from April 19, 1999, through Jan. 16, 2001, inclusive, you may, no later than March 23, 2001, move to be appointed 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 plaintiff." Your ability to share in any recovery, is not, however, affected by the decision whether or not to serve as a lead plaintiff.
The law firm of Berger & Montague, P.C. has more than 50 attorneys, all of whom represent plaintiffs in complex litigation. The Berger firm has extensive experience representing plaintiffs in class action securities litigation and has played lead roles in major cases over the past 25 years, which have resulted in recoveries of several billion dollars to investors. The firm is currently representing investors as lead counsel in actions against Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken and IKON Office Solutions, Inc. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:
"Class counsel did a remarkable job in representing the class
interests."
In Re: IKON Offices Solutions Securities Litigation. Civil
Action No. 98-4286(E.D.Pa.) (partial settlement for $111
million approved May, 2000).
"...[Y]ou have acted the way lawyers at their best ought to act.
And I have had a lot of cases ... in 15 years now as a judge and I
cannot recall a significant case where I felt people were better
represented than they are here... I would say this has been the
best representation that I have seen."
In Re Waste Management, Inc. Securities Litigation, Civil
Action No. 97-C 7709 (N.D. Ill.) (settled in 1999 for $220
million).
If you purchased Pre-Paid Legal securities, or have any questions concerning this notice or your rights with respect to this matter, you may contact:
Sherrie R. Savett, Esquire Karen S. Orman, Esquire Kimberly A. Walker, Investor Relations Manager Berger & Montague, P.C. 1622 Locust Street Philadelphia, PA 19103 Phone: 888-891-2289 or 215-875-3000 Fax: 215-875-5715 Website: http://www.investorprotect.com e-mail: InvestorProtect@bm.net or John J. Breathwit, Esquire Babette Patton, Esquire Breathwit & Patton 101 Park Avenue, Suite 460 Oklahoma City, Oklahoma 73102 (405) 415-1779
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca