NEW YORK, July 12, 2002 (PRIMEZONE) -- Kaplan Fox (kaplanfox.com) has filed a class action suit against Omnicom Group, Inc. ("Omnicom" or the "Company") (NYSE:OMC) and certain of its officers and directors, in the United States District Court for the Southern District of New York. This suit is brought on behalf of all persons or entities who purchased or otherwise acquired Omnicom securities between April 25, 2000 and June 11, 2002, inclusive (the "Class Period").
The complaint alleges that Omnicom and certain of its officers and directors violated the federal securities laws. The complaint alleges, among other things, that during the Class Period defendants reported that Omnicom was experiencing growth in its revenues and earnings, despite the overall economic slowdown and the worst decline in advertising revenue that the industry had ever experienced. Defendants attributed Omnicom's growth to, for the most part, the numerous acquisitions made by the Company.
During 2000 and 2001, Omnicom acquired 73 companies. Omnicom, however, failed to reveal that it strung out the payments on its acquisitions for years to come, yet immediately accounted for the revenue from the acquired companies, thereby pumping up the Omnicom's organic growth rate. During the Class Period, the Company failed to disclose $250 to $350 million in liabilities created by having to make future payments on its acquisitions. Moreover, Omnicom accounted for "earn-out payments" (payments to the acquired companies) as acquisition expenses, rather than compensation, so that the amounts were not subtracted from the Company's net income.
The complaint further alleges that during the Class Period, Omnicom failed to disclose that under certain circumstances, it would be obligated to purchase certain companies in which it had invested. Thereby, Omnicom misrepresented its liabilities. Omnicom also failed to disclose that it transferred its holdings in several troubled Internet companies to Seneca, a company it created, so that it would avoid writing down the losses on the investments. Omnicom's consideration for the transfers was $280 million in Seneca stock, which constituted an overstatement of the value of the investments.
As a result of Defendants' false and misleading statements, investors were damaged, by purchasing Omnicom securities at artificially inflated levels during the Class Period.
Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Chicago and New Jersey, has many years of experience prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com
If you are a member of the Class, you may move the court no later than August 12, 2002 to serve as a lead plaintiff for the Class. In order to serve as a lead plaintiff, you must meet certain legal requirements.
If you have any questions about this Notice, the action, your rights, or your interests, please e-mail us at mail@kaplanfox.com or contact:
Frederic S. Fox, Esq. Shelley Thompson, Esq. Kaplan Fox & Kilsheimer LLP 805 Third Avenue, 22nd Floor New York, NY 10022 (800) 290-1952 (212) 687-1980 Fax: (212) 687-7714 E-mail address: mail@kaplanfox.com Laurence D. King, Esq. Kaplan Fox & Kilsheimer LLP 601 Montgomery Street San Francisco, CA 94111 (415) 772-4700 Fax: (415) 772-4707 E-mail address: mail@kaplanfox.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca