Bala Cynwyd, Pa., April 14, 2003 (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 Southern District of New York on behalf of all who purchased the common stock of CIT Group Inc. ("CIT" or the "Company") (NYSE:CIT) on or traceable to the Company's initial public offering (the "IPO" or "Offering") commenced on or about July 1, 2002, and who have been damaged thereby.
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 alleges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by issuing a materially false and misleading Registration Statement and Prospectus (the "Prospectus") in connection with CIT's Initial Public Offering. As alleged in the complaint, the Prospectus falsely represented that CIT's reserves for losses in its telecommunications finance portfolio were "adequate" despite recent declines in the sector, which were expected to continue. In addition, the Prospectus further characterized as adequate its reserves for credit losses in general. The complaint alleges that these statements were materially false and misleading when made because, among other reasons, (i) the Company's loan loss reserves for its finance portfolio in the telecommunications industry were materially deficient in light of material credit losses that had already been incurred and/or in light of loans in that portfolio which had already been materially impaired; (ii) the Company's representation that its reserves were "adequate" was lacking in any reasonable basis when made because the reserves did not reflect material credit losses in CIT's telecommunications portfolio that had already occurred and/or loans which were already substantially impaired, and had such factors been taken into account, the reserves could not adequately protect against the risk of material future losses; (iii) there was no meaningful disclosure in the Prospectus of CIT's exposure to the declining telecommunications sector and the true risks facing the Company with respect to its risk for credit losses in general were not adequately cautioned against; and (iv) contrary to the representation in the Prospectus, the Company's overall reserves for credit losses, of $554.9 million, were not adequate and were materially understated.
On July 23, 2002, CIT announced that it took a $200 million charge to strengthen the telecommunications loan reserves that it represented were adequate only three weeks previously. On April 8, 2003, the price of CIT common stock closed at $17.40 per share, which is 24% lower than the IPO price of $23 per share.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/currentcases.cfm.
If you are a member of the class described above, you may, not later than June 9, 2003, 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.