BALA CYNWYD, Pa., May 10, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of VeriSign Inc. ("VeriSign") (Nasdaq:VRSN) from January 25, 2001 through April 25, 2002, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges VeriSign Inc. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, 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 lacks 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%.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, which has significant experience and expertise prosecuting class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, or to sign-up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than July 8, 2002, 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.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca