NEW YORK, May 16 /PRNewswire/ -- An investor sued Escala Group, Inc. ("Escala" or the "Company") today in federal court, accusing the company of securities law violations, Berman DeValerio Pease Tabacco Burt & Pucillo announced.
Berman DeValerio (http://www.bermanesq.com/) filed a class action on behalf of shareholders in the U.S. District Court for the Southern District of New York. The complaint, filed as 06-CIV-3740, seeks damages for violations of federal securities laws on behalf of all investors who acquired Escala securities from September 5, 2003 through and including May 8, 2006 (the "Class Period").
To receive a copy of the complaint, you may contact the court, call the firm at (800) 516-9926 or go to http://www.bermanesq.com/pdf/Escala-Cplt.pdf.
The lawsuit claims that Escala and a number of individual defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. Sections 78j(b) and 78t, and SEC Rule 10b-5, 17 C.F.R. Section 240.10b-5, promulgated thereunder.
Escala is a New York City-based global collectibles merchant and auction house network. On September 28, 2005, Escala announced that it had changed its name from Greg Manning Auctions, Inc., to Escala Group, Inc. Prior to the name change, Escala traded on the Nasdaq under the symbol GMAI.
According to the plaintiff's complaint, the defendants made materially false and misleading statements, and/or omitted material facts necessary to make those statements not misleading, concerning Escala's financial results throughout the Class Period.
Among other things, the defendants:
* Claimed they were achieving record results, which were actually achieved
in part as a result of questionable and potentially illegal activities
of the Company's majority shareholder, Afinsa Bienes Tangibles, S.A.
("Afinsa") of Spain;
* Failed to maintain adequate internal systems, procedures, and controls
such that the Company's officers and directors were able to allow these
questionable and potentially illegal activities to continue; and
* Did not prepare Escala's financial statements in accordance with U.S.
Generally Accepted Accounting Principles or SEC regulations.
On May 9, 2006, news emerged that Spanish officials had raided the Madrid offices of Escala and its majority shareholder, Afinsa, concerning what Spanish authorities described as a glorified pyramid scheme. Nine people have since been arrested in Spain in relation to the scheme.
In reaction to this news, Escala's stock fell by approximately 85% on heavy trading over the next few days while news continued to be released regarding the alleged pyramid scheme.
If you acquired Escala securities from September 5, 2003 through and including May 8, 2006, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Jeffrey C. Block, Esq.
Abigail R. Romeo, Esq.
Allison K. Jones, Esq.
One Liberty Square
Boston, MA 02109
(800) 516-9926
If you wish to apply to be the lead plaintiff in this action, a motion on your behalf must be filed with the court no later than July 10, 2006. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action, or you may submit information online at http://www.bermanesq.com/Securities/Signup1.asp?caseid=573. Please note, you may also retain counsel of your choice and need not take any action at this time to be a class member.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities and antitrust law violations. The firm has 37 lawyers in Boston, San Francisco, and West Palm Beach.
Contact: Abigail R. Romeo, Esq., (800) 516-9926
