Wechsler Harwood Announces Class Action Suit Against StarMedia Network, Inc. (STRM)
PRNewswire
NEW YORK
Nov 27, 2001
On November 27, 2001, Wechsler Harwood Halebian & Feffer LLP ("Wechsler Harwood") commence a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all purchasers of StarMedia Network, Inc. ("StarMedia" or the "Company") securities between April 11, 2000 and November 19, 2001, inclusive (the "Class Period"), against StarMedia, Fernando J. Espuelas (co-founder of the Company, former Chief Executive Officer, and former Chairman of the Board of Directors), and Steven J. Heller (former Chief Financial Officer).
The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period concerning the Company's financial performance.
The complaint alleges that StarMedia reported artificially inflated financial results in press releases and filings made with the SEC by improperly recognizing revenue in violation of Generally Accepted Accounting Principles ("GAAP"). Specifically, the complaint alleges that two of the Company's primary subsidiaries, AdNet S.A. de C.V. and StarMedia Mexico, S.A. de C.V, had engaged in improper accounting practices which had the effect of materially overstating StarMedia's reported revenues and earnings by at least $10 million. On November 19, 2001, as alleged in the complaint, StarMedia issued a press release announcing that based on the "preliminary" results of an internal investigation into its accounting practices, it expects to restate its financial statements for fiscal year 2000 and the first two quarters of 2001 and that those financial statements should not be relied upon. The Company further reported that its Chief Financial Officer had "resigned." Immediately following the announcement of the restatement, the NASDAQ Stock Market halted trading in StarMedia stock, pending the receipt of additional information from the Company. StarMedia stock last traded at $0.38 per share, which is 98.5% less than the Class Period high of $25.50, reached on April 11, 2000.
Plaintiff seeks to recover damages on behalf of class members. If you are a member of the Class described above, and if you meet certain other legal requirements, you may, no later than January 21, 2002, move the Court to serve as a lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. section 78u-4). Please note, however, that class members need not seek appointment as lead plaintiff in order to share in any recovery resulting from this litigation.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (http://www.whhf.com/) has more information about the firm.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue 8th Floor New York, New York 10022 Phone: 877-935-7400 (Toll Free) Patricia Guiteau, Shareholder Relations Department: pguiteau@whhf.com.
SOURCE: Wechsler Harwood Halebian & Feffer LLP
Contact: Patricia Guiteau, Shareholder Relations Department,
pguiteau@whhf.com, or Wechsler Harwood Halebian & Feffer LLP, +1-877-935-7400
- Toll Free
Website: http://www.whhf.com/