NEW YORK, Nov. 21, 2005 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action lawsuit in the United States District Court Eastern District of Michigan, Southern Division, against General Motors Corporation ("General Motors", "GM", or the "Company") (NYSE:GM), on behalf of purchasers of the common stock of General Motors during the period from April 18, 2001 to November 9, 2005, inclusive (the "Class Period"). Also named as Defendants are G. Richard Wagoner, Jr., Chief Executive Officer and President from June 1, 2000 until May 2003, John M. Devine, Chief Financial Officer and Vice Chairman of the Board since January 2001, and Peter Bible, Chief Accounting Officer. The class action is seeking to pursue remedies under the Securities Exchange Act of 1934.
The complaint alleges that Defendants' inflated the Company's annual results for 2001 - 2004 and quarterly results for 2005. The complaint further alleges that Defendants knew or recklessly disregarded that the Company's inflated financial results were due to improper accounting practices related to booking credits from suppliers, as well as valuing investments in other companies, which overstated the Company's revenues, cash flow, earnings and asset valuations.
On November 9, 2005, GM revealed that its income for fiscal year 2001 had been overstated by as much as $300-400 million - equivalent to about 50% of the profit it reported at the time - by "erroneously" booking credits from suppliers. The Company also revealed that it was conducting an internal review of the accounting for credits it had received from suppliers during fiscal years 2001-2005; that, as of September 30, 2005, its controls and procedures for evaluating assets were materially flawed.
In response to these revelations, GM's stock price fell $1.12 per share on unusually heavy trading, representing a 4.5% decline in the stock's value.
The announcement followed on the heels of the Company's October 5, 2005 disclosure that it had overstated by $850 million the value of its stake in Fuji Heavy (best known as the maker of Subaru automobiles). The writeoff of this amount increased GM's quarterly loss to $1.07 billion, nearly four times the loss previously reported.
If you purchased the securities of General Motors during the Class Period, you have until January 20, 2006 to ask the Court to appoint you as lead plaintiff for the Class. Lead plaintiffs must meet certain legal requirements. Shareholders outside the United States may also join the action, regardless of where they live or which exchange was used to purchase the securities. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Teresa L. Webb (tlwebb@pomlaw.com) or Carolyn S. Moskowitz (csmoskowitz@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz Firm, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.