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Class-Action Lawsuit Filed Against Acclaim

by Rick Powers - March 15, 2003, 2:02 pm EST
Total comments: 6 Source: Cauley Geller

The law firm filing the suit alleges misleading statements about financial announcements.

The lawfirm of Cauley Geller Bowman Coates & Rudman is filing a class action lawsuit against Acclaim Entertainment on behalf of Acclaim's investors. The complaint alleges that Acclaim issued statements about the company's income and financial performance that were either misleading or false, and that investors suffered as a result.

Interestingly, listed in the information that Acclaim allegedly withheld from investors is information about the lagging sales of Turoc: Evolution (sic), and Aggressive Inline. The suit also says that by developing games like BMX XXX, the company severely limited its ability to get into retail channels that it needed to sell the games. Other issues the suit mentions include the company's inability to track certain important pieces of sales information, and that there was no basis for any optimism in any public statements made by Acclaim.

The crux of the complaint is that when Acclaim issued a statement that it was expecting to report an operating loss for the 4th quarter, shares dropped precipitously, losing almost 30% of their value in a single day. Basically, the suit says that this performance proves that Acclaim was lying about its financial health in earlier reports.

If you are an shareholder in Acclaim and bought shares between January 11th, 2002, and September 19th, 2002, you can go to the Cauley Geller website and file to be included in the complaint.

Talkback

The OmenMarch 15, 2003

I should file a lawsuit for those horrible QB club games.

Grey NinjaMarch 15, 2003

Why hasn't MS been sued yet?

Uncle Rich AiAiMarch 16, 2003

Quote

Originally posted by: Grey Ninja
Why hasn't MS been sued yet?


maybe b/c they have the best lawyers that money can buy?

zumpiezMarch 16, 2003

Erm, what have they lied about?

ArbokMarch 16, 2003

Quote

Originally posted by: zumpiez
Erm, what have they lied about?


I think he was refering to the fact that MS has been talking of the Xbox as a success to investors... despite the fact that they are still losing a great deal of money of it, and that it has failed to meet their overall expectations.

Grey NinjaMarch 16, 2003

Hedorah has it basically right. (Although I was thinking of their marketting as well).

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