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Saint Patrick’s Day and green beer is easy to understand.
However, not being an avid basketball fan, it is hard to
understand the emotions of March Madness. But basketball
madness is real in schools and offices all across the
country as everyone checks to see how their
“bracket selections” have fared.
Evidently, this is the first time that none of the number one
seeds advanced to the Final Four since the field expanded
to 64 teams. Perhaps most stunning is the advance of a
Washington, DC area commuter school, George Mason,
into the Final Four. Some commentators thought George
Mason shouldn’t have been included into the field of 64.
But how about that other March Madness - corporate
irregularities - that we discussed last week? As you might
suspect, it, like the basketball tournament, isn’t over.
On April 3, a national basketball champion (probably LSU)
will be crowned, but unfortunately for investors the
“high season” for restatements will continue for another
few weeks. While only three or four companies are
normally listed below as “Cases under Investigation,”
now the list is over a dozen. Please check over this list
and stay tuned because it is likely that additional restatements
and delays in filing required SEC forms will occur this week.
Sarbanes-Oxley was supposed to have diminished the
number of corporate restatements, but this doesn’t appear
to be the case. So now, even in the midst of the trial of
Enron’s Ken Lay and Jeffrey Skilling, corporate irregularities
continue. As always, it is the investing public suffers.
Speaking of Pain
Consider the investors in PainCare Holdings, Inc. (PRZ).
The Company, through its subsidiaries, provides pain relief
solutions in North America. However it doesn’t offer a pain
relief solution for its investors.
Its investors need pain relief as PainCare’s stock has
plummeted in light of recent disclosures. Specifically,
on March 15, 2006, the Company announced that it would
not be filing an annual report on Form 10-K for the fiscal
year 2005 and that its financial filings for the years 2000
through 2004 and the first three quarters of 2005 were
not in compliance with GAAP and would have to be restated.
Ouch! Investors who purchased between August 27, 2002
and March 15, 2006 are affected.
Try Fake Blood
Northfield Laboratories, Inc. (NFLD) is a one-product company.
It makes PolyHeme which is used as a substitute for blood.
It has been alleged that PolyHeme, the Company's sole
product, posed serious risks to users. Specifically,
on February 22, 2006, a story in The Wall Street Journal
revealed that ten of 81 patients who received the substitute
blood in a test several years ago suffered a heart attack
within seven days, and two of those died. Not surprisingly,
Northfield Laboratories stock plummeted after this news.
Investors who purchased the stock between
February 20, 2004 and February 21, 2006, are affected.
Another Auto Fiasco for Investors
Investors have been dismayed by negative accounting
revelations in the automobile industry in the past year,
such as restatements by GM and Delphi. Another company
now has joined the list -- CSK Auto Corporation (NYSE),
a specialty retailer in the automotive aftermarket.
CSK Auto stunned its investors when, on March 27, 2006,
the Company announced that it would not file its fourth
quarter and fiscal 2005 financial results on time. The
Company also disclosed that its Audit Committee is
investigating accounting errors and irregularities.
Most troubling, CSK Auto disclosed that it will restate its
financial statements for 2002 through 2005. It appears
that the reason for the restatement relates to accounting
irregularities, including overstating the value of inventory
and the improper accounting for costs and vendor
allowance receivables. Investors who purchased
between June 23, 2003 and March 24, 2006, are affected.
If you are an affected investor in CSK Auto Corporation,
PainCare Holdings, or Northfield Laboratories or any of the
other cases listed below that are under investigation, you
may wish to contact us at info@securitiessleuth.com or
877.511.4717 to discuss your options. It is essential that
investors take action to redress corporate fraud.
Other Cases Under Investigation
Merge Technologies Inc. (MRGE) On Friday, March 17,
Merge Technologies Inc., which does business under the
name Merge Healthcare, announced that it would not file
its annual report on time because the Company needs
more time to investigate accounting improprieties relating
to potentially improper revenue recognition and tax
accounting, and to investigate anonymous complaints
received by the Company that appear to be related to
the accounting issues. Investors who purchased between
August 2, 2005 and March 17, 2006, are affected.
GMH Communities Trust (NYSE: GCT) On March 13, 2006,
the Company’s shares tumbled 25% after it disclosed,
among other things, that it is revising downward its
earnings guidance for 2005 and withdrawing its previously
issued earnings guidance for the year ending
December 31, 2006 and that the delay relates to an
Audit Committee investigation following its receipt of a
letter from the Company's CFO alleging, among other
things, a "tone at the top" problem within Company
management. Investors who purchased stock between
May 5, 2005 and March 10, 2006, are affected.
America Service Group Inc. (ASGRE) On March 15, 2006,
America Service Group Inc. disclosed that it will restate
previously filed financial statements for 2001 through
2004 and for the first six months of 2005 because an
internal investigation revealed financial improprieties
at one of the Company’s subsidiaries. The Company
also disclosed that the U.S. Attorney for the Middle
District of Tennessee is conducting an inquiry.
Following this disclosure, American Service Group stock
declined $5.65 per share, or approximately 29%, to
close at $13.95 per share. Investors who purchased
its stock between April 25, 2001 and March 15, 2006,
probably are affected.
PHH Corporation (PHH) Shares of PHH fell after the
Company announced that it would be delaying filing of
its Form 10-K with the SEC because of accounting
adjustments related to its spin-off from Cendant Corp.
Investors who purchased PHH between May 12, 2005
and March 1, 2006, are affected.
Global Power Equipment (GEG) On March 9, 2006, the
Company announced that its gross profits were
overstated for two China projects and that a restatement
is required. Since May 9, 2005, its stock is down 57%.
It appears that investors who purchased Global Power
Equipment between April 26, 2004 and March 5, 2006,
are affected.
Nature's Sunshine Product, Inc. (NATRE) On March 20, 2006,
Nature’s Sunshine disclosed that the Company may
restate its financial results for the first three quarters of
2005 and the years 2002 through 2004 and it would likely
be delisted from NASDAQ. Investors who purchased
between February 25, 2004 and March 17, 2006, are
affected.
Bausch & Lomb (BOL) At the end of December 2005,
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 BOL between
January 27, 2005 and December 22, 2005, are affected.
Allion Healthcare, Inc. (ALLI) On March 9, 2006, the
Company disclosed that it expects to restate its financial
results for the quarter ended June 30, 2005 and the
nine months ended September 30. The following day its
stock plummeted. It appears that investors who purchased
Allion Healthcare between June 22, 2005 and
March 9, 2006, are affected.
Terayon (TERNE) On March 1, 2006, the Company disclosed
that it was restating its financial statements for the
year ended December 31, 2004 and the first two quarters
of the year ended December 31, 2005. Investors who
purchased TERNE between April 29, 2004 and
March 1, 2006, are affected.
Chicago Bridge &Iron Company (CBI) On February 3, 2006,
CBI fired its Chairman, President and Chief Executive
Officer and disclosed that its expects to issue revised
guidance regarding its results of operations for the year
ended December 31, 2005 and that all previous
earnings guidance issued by the Company for 2005 is
no longer operative. Investors who purchased CB&I
between March 9, 2005 and February 3, 2006, 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.
Bristol-Myers Squibb (BMY)
Class Period: October 19, 1999 to March 20, 2002
Claims Deadline: June 30, 2006
Claims Administrator: Garden City
Eaton Vance Corp. (EV)
Class Period: May 25, 1998 to March 15, 1999 and March 13, 2000 to March 2, 2001
Claim Deadline: May 5, 31, 2006
Claims Administrator: Complete Claims
Eagle Building Technologies (EGBT)
Class Period: November 21, 2000 to February 14, 2002
Claims Deadline: May 1, 2006
Claims Administrator: Berdon
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
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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