PHILADELPHIA) February 27, 2001 (PRIMEZONE) -- The law firm of Berger & Montague, P.C. (http://www.investorprotect.com) has filed a class action in the United States District Court for the Eastern District of Pennsylvania on behalf of all persons or entities who purchased U.S. Interactive, Inc. (Nasdaq:USITQ) securities during the period from February 10, 2000, through November 8, 2000, inclusive (the "Class Period").
The complaint charges certain of its officers and/or directors with violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 by reason of material misrepresentations and/or omissions in SEC filings and other public statements. Specifically, the complaint alleges that the defendants embarked on a scheme to defraud investors in order to artificially boost USIT's stock price so that they could sell their own USIT stock for proceeds of over $5 million during the Class Period. The complaint also alleges that, during the Class Period, while representing the strength of the Company's business condition and prospects, defendants failed to disclose adverse facts that made their statements false and misleading. Among other things, defendants failed to disclose that an $80 million debt owed to the Company in connection with its acquisition of SoftPlus, Inc. would not be paid off and would hamper the Company's ability to reach profitability, that USIT was being adversely affected by the dot-com customers that were having financial difficulties and that it was being adversely affected by the lengthening of the sales cycle.
On September 20, 2000, USIT pre-announced that its third quarter performance would be lower than expected due to rapid changes in the Internet professional services market, including lengthening sales cycles, re-evaluation of e-business initiatives by clients and prospects, and reduced funding available to dot-com clients. Following this surprising disclosure, USIT stock dropped over 33% from the day before on record volume of 2,105,500 shares, to close at $12.937.
The September 20 disclosure, however, did not reveal the full extent of USIT's problems. On November 8, 2000, when USIT announced its third quarter performance, it disclosed that not only were its third quarter financial results worse than the Company had pre-announced on September 20, 2000, but that the Company wrote-off $8.8 million of uncollectible accounts receivable during the third quarter, which amounts were primarily related to services performed for dot-com organizations.
Following this full disclosure, USIT stock dropped further on high volume of 1.5 million shares, to close at $0.81 per share. USIT's 10-Q for its third quarter later disclosed that, of the amounts written off, $3.9 million was written off for NetSmart, and $1.1 million was written off for Exist Corporation, companies which were owned in part by certain of the defendants.
The complaint alleges that as a result of the defendants' conduct, plaintiff and other members of the Class suffered damages.
The lawsuit seeks to recover losses suffered by individual and institutional investors who purchased the Company's securities during the Class Period at artificially inflated prices.
If you purchased U.S. Interactive, Inc. securities during the Class Period, you may, no later than April 1, 2001 move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in U.S. Interactive, Inc. securities during the Class Period, please contact Berger & Montague, P.C. at investorprotect@bm.net for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
The law firm of Berger & Montague, P.C. has over 50 attorneys, all of whom represent plaintiffs in complex litigation. The Berger firm has extensive experience representing plaintiffs in class action securities litigation and has played lead roles in major cases over the past 25 years that have resulted in recoveries of several billion dollars to investors. The firm is currently representing investors as lead counsel in actions against Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken and IKON Office Solutions, Inc. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:
"Class counsel did a remarkable job in representing the class interests." In Re: IKON Offices Solutions Securities Litigation. Civil Action No. 98-4286(E.D.Pa.) (partial settlement for $111 million approved May, 2000).
"...[Y]ou have acted the way lawyers at their best ought to act. And I have had a lot of cases ... in 15 years now as a judge and I cannot recall a significant case where I felt people were better represented than they are here... I would say this has been the best representation that I have seen." In Re Waste Management, Inc. Securities Litigation, Civil Action No. 97-C 7709 (N.D. Ill.) (settled in 1999 for $220 million).
If you purchased U.S. Interactive, Inc. securities and have any questions concerning this notice or your rights with respect to this matter, please contact:
Sherrie R. Savett, Esquire Douglas M. Risen, Esquire Kimberly A. Walker, Investor Relations Manager Berger & Montague, P.C. 1622 Locust Street Philadelphia, PA 19103 Phone: 888-891-2289 or 215-875-3000 Fax: 215-875-5715 Website: http://www.investorprotect.com e-mail: InvestorProtect@bm.net
More information on this and other class actions can be found at www.primezone.com/ca