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Yesterday, May 9th, the shares of the Escala Group Inc.
(Nasdaq: ESCL) declined approximately $17.50 per share
or 55% on the news that Spanish police raided the offices
of Escala Group, its majority owner Afinsa and another
company in a probe of alleged fraud involving collectible
stamps.
The Escala Group claims to be a global integrated network
of companies in the collectibles market with operations in
North America, Europe and Asia as well as on the Internet.
Spanish police arrested eight people in connection with the
alleged fraud. It appears that investors who purchased
Escala stock between September 5, 2003 and May 8, 2006,
are affected.
Chairman & CEO Resign at POWI
It is generally trouble when the Chairman "resigns," but
when the Chairman and the CFO both resign, it's bad news
for shareholders.
That's exactly what happened last week at Power Integrations, Inc.
(NASDAQ: POWI).
On May 4, 2005, the Chairman and CFO resigned. The next
day, POWI stock tanked after the Company announced their
departure. The Company also announced that it may need
to restate its historical financial statements for each of the
fiscal years 1999 to 2004 and for the first three quarters of
the fiscal year ended December 31, 2005. Investors who
purchased stock between July 19, 2001 and May 4, 2006,
are affected.
Another CEO Dumps Shares
Its a familiar story: the CEO dumps his shares before bad
news about the Company is disclosed. The most recent
example is XM Satellite Radio Holdings (NASDAQ: XMSR).
On February 16, 2006, the Company disclosed higher than
expected expenses and net loss due to greater than expected
spending on new subscription acquistions. The Company
also disclosed that a director had resigned due to his concerns
about the cost of growth in terms of losses.
Of course, before any of these developments were reported,
the Company's CEO dumped nearly all his shares
approximately $11.8 million. Good news for him, bad news
for investors who bought XM shares. Specifically, those
investors who purchased stock between
July 25, 2005 and February 15, 2006, are affected.
DSCO Discloses FDA Problems.
Discovery Laboratories (NASDAQ: DSCO) is a biotech company
that develops Surfactant Replacement Therapies for respiratory
diseases. The Company had represented for some time that
it would receive FDA approval in April 2006. But on
April 24, 2006, the Company's stock dropped more than 50%
after it revealed that the regulatory process would be
significantly delayed. Investors who purchased DSCO between
December 28, 2005 and April 25, 2006, are affected.
Other cases of particular interest to many of our readers are:
PXRE Group Ltd. (NYSE: PXT) On February 16, 2006, the
Company announced that it would be increasing its estimates
of the net pre-tax impact of Hurricanes Katrina, Rita and Wilma
by an amount between $281 million to $311 million for the year
ended December 31, 2005. By the end of the day, PXRE shares
had fallen over 65% on high trading volume. Investors who
purchased PXT between July 28, 2005 and February 16, 2006,
are affected.
Richardson Electronics (NASDAQ: RELL) On April 4, 2006, after
the close of trading, RELL disclosed: 1) that it would restate its
financial statements for the years ended May 31, 2003,
May 29, 2004 and May 28, 2005, and the interim periods ended
September 3, 2005 and December 3, 2005; and 2) the Company’s
President, Chief Operating Officer and Board Member resigned.
Investors who purchased the stock between October 1, 2002
and April 6, 2006, are affected.
America Service Group Inc. (ASGRE) On March 15, 2006, the
Company disclosed that it will it will restate previously filed
financial statements for the years ended December 31, 2001
through December 31, 2004 and for the first six months of 2005,
and the U.S. Attorney for the Middle District of Tennessee is
conducting an inquiry. Not surprisingly, its stock plummeted 29%
the following day. Investors who purchased its stock between
April 25, 2001 and March 15, 2006, probably 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.
If you are an affected investor in any of these companies,
you may wish to contact Mark McNair at info@securitiessleuth.com
or 877.511.4717 to discuss your options.
However, at this time there are an unusually large number of
corporate irregularities. Other cases of corporate irregularities
under investigation include:
Fairfax Financial Holdings, Ltd. (FFH)
Zale Corporation (ZLC)
Tier Technologies, Inc. (TIERE)
CSK Auto Corporation (CAO)
Nature's Sunshine Product, Inc. (NATRE)
Global Power Equipment (GEG)
Bausch & Lomb (BOL)
Allion Healthcare, Inc. (ALLI)
Terayon (TERNE)
Northfield Laboratories, Inc. (NFLD)
PainCare Holdings, Inc. (PRZ)
Merge Tech Inc. (MRGE)
Estee Lauder Companies Inc. (NYSE: EL)
Sea Containers, Ltd. (NYSE: SCR-A)
For details regarding any of these cases, go to
www.securitiessleuth.com.
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.
Two cases that have recently settled that may be of particular
interest are:
Network Engines, Inc. (NENG)
Class Period: November 11, 2003 to December 10, 2003
Claims Deadline: August 8, 2006
Claims Administrator: Rust Consulting Group
Boston Chicken, Inc. (BOST)
Class Period: February 6, 1995 to October 4, 1998
Claims Deadline: August 17, 2006
Claims Administrator: Hefler Radetich
Information regarding other recent settled cases, including the
cases listed below can be found at www.securitiessleuth.com.
Surebeam Corp. (SURE)
Salton, Inc. (SFP)
Bristol-Myers Squibb (BMY)
Royal Ahold N.V. (AHO)
Textron, Inc. (TXT)
Bristol-Myers Squibb (BMY)
Eaton Vance Corp. (EV)
eFunds Corporation (EFD)
Uniroyal Technology Corp.(UTCIQ)
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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