NEW YORK, Feb. 8, 2002 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action lawsuit against Elan Corporation PLC ("Elan" or the "Company") (NYSE:ELN), on behalf of all persons or entities who purchased American Depository Shares ("ADRs") of Elan during the period between April 23, 2001 and February 4, 2002, inclusive (the Class Period). The case was filed in the United States District Court, Southern District of New York, located at 40 Centre Street, New York, NY 10007. The Court may be reached by telephone at (212) 805-0136.
The complaint alleges that Elan, a worldwide specialty pharmaceutical company that discovers, develops and markets therapeutic products and services in neurology, pain management and oncology, and three of the Company's senior officials, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements to the market concerning Elan's revenues and earnings prospects.
In particular, it is alleged that during the Class Period, defendants improperly reported favorable financial results for the Company, which were artificially inflated. Elan allegedly manipulated its results by improperly accounting for joint ventures that it entered into with other companies, the primary purpose of which was to create the appearance of income growth for the Company. The Company invested in these joint ventures, which then used the proceeds to fund purchases from Elan, which Elan then reported as revenues. In an article published in the Wall Street Journal on January 30, 2002, former Securities and Exchange Commission ("SEC") Chief Accountant Lynn Turner reportedly questioned the propriety of Elan's accounting practices. Following this article, the price of Elan ADRs fell from $35.20 to $29.25.
Thereafter, on February 4, 2002, Elan shocked the market by issuing a Press Release which detailed the Company's 2001 financial results and effectively acknowledged the Company's misleading accounting for "off-balance sheet arrangements." The Press Release stated that Elan had two QSPEs ("Qualified Special Purpose Entities") which it had not consolidated in its financial results as presented under Generally Accepted Accounting Principles ("GAAP"). The Company further revealed that if these QSPEs had been consolidated, 2001 profit under GAAP would have been $211.4 million, or $0.59 per share, instead of the reported $347.7 million, or $0.94 per share as was originally reported. Furthermore, if these QSPEs were included, Elan's total debt would have been almost $3 billion, approximately $1 billion more than originally reported. As a result of this news, Elan's ADRs fell, closing at $14.85 a share, a total decline of over 50% from the pre-revelation price.
If you purchased the ADRs of Elan during the Class Period, you have until April 5, 2002 to ask the Court to appoint you as lead plaintiff for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz firm, which has offices in New York and Chicago, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca