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Investors in Take Two Interactive Software Inc. (TTWO),
the makers of the Grand Theft Auto video game series,
have been stunned by several adverse disclosures affecting
the Company’s business and stock price.
First, on January 18, 2006, Take Two disclosed that it was
not been able to complete its annual report for the year ended
October 31, 2005 on time because management concluded that
material weaknesses existed as of October 31, 2005.
Subsequently, on January 25, 2006, the Company’s audit
committee chairwoman resigned and stated in an SEC filing that
management failed to keep the board informed of key issues.
She stated that she was concerned about, among other things,
“various SEC inquiries directed at Take-Two and its employees
and an increasingly unhealthy relationship between senior
management and the board of directors'.
In addition, on January 27, 2006, the city of Los Angeles sued
Take-Two for selling pornographic video games to children
with its best-selling game, Grand Theft Auto: San Andreas.
The law suit alleges the Company: (1) failed to disclose the
pornographic content to get the game onto shelves of major
retailers that do not carry games rated 'Adults Only 18+.';
(2) deceived consumers by first claiming that hackers had
modified the original version of the games, then announcing
a week later that the sex scenes were written into the original
game code; and (3) knowingly deceived the video game
ratings board and flouted California law to market the game
as suitable for teens.
On January 27, 2006, shares of Take Two declined from
$17.03 to $14.69, or approximately 14%.
The Company is currently being investigated by the FTC for
possibly engaging in unfair or deceptive acts or practices in
the sale of its Grand Theft Auto video game. Several
attorneys general have requested documents from the
company concerning this issue.
Investors who purchased Take Two between October 24, 2004
and January 27, 2006 are affected.
Construction Firm Needs Rebuilding
Chicago Bridge & Iron Company N.V. (CBI) is incorporated
in the Netherlands and operates worldwide as an engineering,
procurement, and construction company. On February 3, 2006,
CBI fired its Chairman, President and Chief Executive Officer,
and Executive Vice President and Chief Operating Officer.
In addition, the Company disclosed that it expects to issue
revised guidance regarding its results of operations for the
year ended Dec. 31, 2005 and that all previous earnings
guidance issued by the Company for 2005 is no longer
operative.
Also on February 3, 2005, an attorney for the fired executives
issued a statement that claimed his clients were not given an
opportunity to respond to an audit committee report. The
report is not public, but it appears to implicate the former
executives in accounting improprieties. As a result of these
disclosures, the stock declined $6.76 per share or
approximately 22%, on heavier than usual volume.
Investors who purchased CBI between March 9, 2005 and
February 3, 2006 are affected.
Bad News for Applica Investors
An all too familiar story. A company paints a glowing picture
and then its shares plummet as its true condition is revealed.
Applica Inc (APN) engages in the manufacture, marketing, and
distribution of small household appliances. The Company
markets and distributes kitchen products, home products,
pest control products, pet care products, and personal care
products.
On April 20, 2005 the Company revealed that it would not come
near achieving the guidance they had previously sponsored
and/or endorsed, that its business was suffering from numerous
adverse factors and that it was marking down inventory and
experiencing increased warranty expenses.
Investors who purchased. Applica between November 4, 2004
and April 28, 2005, are affected.
If you are an affected Take Two, CBI or Applica
investor, or an investor in any of the cases listed below
under investigation, you may wish to contact us at
info@securitiessleuth.com or 877.511.4717 and if you
leave a telephone number where you would like to be
reached, it would greatly facilitate communication.
Cases Under Investigation
Nautilus, Inc. (NLS)
On January 18, 2006, before the opening
of the market, the Company disclosed that it expected fourth
quarter 2005 net sales in the range of $179-183 million and
earnings per share in the $0.07-0.12 range. Previously, on
November 2, 2005, the Company provided fourth quarter
2005 guidance of net sales of $210 million and earnings
per share in the $0.44-0.48 range.
The market reacted strongly to the news and the stock
plunged almost 25%. Investors who purchased Nautilus
between April 27, 2005 and January 16, 2006 are affected.
Tumbleweed Communications Corp. (TMWD)
On January 9, 2006, the Company disclosed that it expected a
net loss of 1 cent to 2 cents a share, instead of a profit,
and that its CEO and Chairman resigned. On January 10, 2006,
the Company’s stock tumbled 20%. Investors who purchased
the stock between October 19, 2005 and January 9, 2006
are affected.
Bausch & Lomb (BOL)
At the end of December the Company indicated that it would
restate its financial results dating back to 2000 following an
investigation into improper conduct by management of its
Brazilian subsidiary. Investors who purchased in 2005 are
affected.
Now with respect to settled cases. If you are an affected
investor – you purchased any of these stocks during the
relevant class period, you may wish to contact the claims
administrator to obtain additional information. Remember,
if you don’t submit your claim form, you won’t receive your
proportionate share of recovery.
eFunds Corporation (EFD)
Class Period: July 21, 20000 to October 24, 2002
Claims Deadline: May 5, 2006
Claims Administrator: Gilardi
Uniroyal Technology Corp.(UTCIQ)
Class Period: February 8, 2000 to May 13, 2002
Claims Deadline: June 28, 2006
Claims Administrator: Garden City
Solectron Corp. (SLR)
Class Period: June 18, 2001 to September 26, 2002
Claims Deadline: March 28, 2006
Claims Administrator: Garden City
NUI Corp. (NUI)
Class Period: November 8, 2001 to October 17, 2002
Claims Deadline: March 7, 2006
Claims Administrator: Garden City
Asia Pulp & Paper Company, Ltd. (APUUY)
Class Period: August 28, 1999 to April 4, 2001
Claims Deadline: March 6, 2006
Claims Administrator: Analytics
Cornell Companies, Inc. (CRN)
Class Period: March 6, 2001 to March 5, 2002
Claims Deadline: March 3, 2006
Claims Administrator: Gilardi
Again, if you are affected by a settled case, then you should
contact the claims administrator (rather than us). However,
if you are an affected investor in any of the companies under
investigation, you many wish to contact us so that you
can consider your options.
Likewise, if you happen to be aware of corporate restatements
or other financial fraud -- especially if you're a victim --
you're encouraged to contribute to the Sleuth by giving your
own tip-offs at www.securitiessleuth.com or by e-mailing
info@securitiessleuth.com. You can also call Mark McNair
at 877-511-4717. If you have a friend or colleague you
think would benefit from The Sleuth, please pass along
this issue and ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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