NEW YORK, May 16, 2002 (PRIMEZONE) -- Wechsler Harwood Halebian & Feffer LLP ("Wechsler Harwood") announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York (the "Court"), on behalf of all persons and entities who purchased Edison Schools, Inc. ("Edison" or the "Company") (Nasdaq:EDSN) common stock from November 10, 1999 through May 14, 2002 (the "Class Period").
The complaint charges Edison, Edison's auditor PricewaterhouseCoopers LLP ("PWC"), and Edison's chief executive officer and chief financial officer, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The violations, as the complaint alleges, stem from the materially false and misleading statements made by the defendants during the class period that, as detailed below: (i) misrepresented Edison's business, operations and financial performance; and (ii) caused Edison' stock to trade at artificially-inflated prices.
The complaint alleges that, during the class period, Edison misrepresented and inflated its publicly reported revenues, and misrepresented and deflated its publicly reported liabilities. As the complaint alleges, investigative reporting on February 13, 2002 first apprised the investing public of the former, and an SEC cease and desist order on May 14, 2002 prompted Edison to admit to the latter. As more particularly alleged in the complaint, Edison over-reported revenues by recording as revenue monies paid for teachers' salaries, student transportation and utility bills that were remitted directly by Edison's clients (i.e., school districts). Although Edison never actually received these monies, Edison recorded them as revenue in its financial statements. Thus, Edison was able to boast revenue growth in its financial statements disseminated to the investing public. When this information was belatedly disclosed to the market on February 13, 2002, the following day, the price of Edison's' shares dropped as low as $12.75. On May 14, 2002, Edison, in a settlement with the SEC, agreed to restate its financial statements so as to correctly account for certain liabilities that had not previously been reported. The following day, Edison's shares traded as low as $2.50 per share.
If you wish to apply to be lead plaintiff in this action, a motion must be filed on your behalf with the court no later than July 15, 2002. You must meet certain legal requirements. You may contact the attorneys at Wechsler Harwood to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whhf.com) has more information about the firm. If you wish to discuss this action, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Ramon Pinon, Wechsler Harwood Shareholder Relations Department: rpinoniv@whhf.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.