Property ManagementClass Action Begins Against Homestore
Milberg Weiss
(http://www.milberg.com/homestore/) today announced that a class action has
been commenced in the United States District Court for the Central District
of California on behalf of purchasers of Homestore.com, Inc. (``Homestore"")
(NASDAQ:HOMS - news) common stock during the period between July 20, 2000
and December 21, 2001 (the ``Class Period"").
The complaint charges Homestore and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Homestore provides
an online marketplace for home and real estate-related information, products
and services. On July 19, 2000 (after the close of the market), Homestore
issued a release of its positive 2Q 00 results, causing Homestore"s stock
price to soar by more than $7 (or 25%) the following trading day. The
complaint alleges that as part of their effort to boost the price of
Homestore stock, defendants misrepresented Homestore"s true prospects in an
effort to conceal Homestore"s improper acts until they were able to sell at
least $16 million of their own Homestore stock. In order to overstate
revenues and assets in 2Q 00, 3Q 00, 4Q 00, 1Q 01, 2Q 01 and 3Q 01,
Homestore violated Generally Accepted Accounting Principles and SEC rules by
engaging in improper ``roundtrip"" transactions. These transactions had the
effect of dramatically overstating revenues and assets. This came to an end
(though unbeknownst to the public) in the Company"s 3Q 01 as the Company"s
main roundtrip partner stopped doing these transactions with the Company.
Following the release of the Company"s 3Q 01 results, the Company also
slashed its revenue projections for 2002 from $563 million to $375-$425
million as a result of a material decline in its business with its main
``roundtrip"" partner. On this news the Company"s shares dropped by more
than 50% the following trading day. Then, on December 21, 2001 (after the
close of the market), the Company partially admitted that its past
accounting for its prior results was inaccurate. On this news the Company"s
shares were halted and have not traded since.
Plaintiff seeks to recover damages on behalf of all purchasers of Homestore
common stock during the Class Period (the ``Class""). The plaintiff is
represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise
in prosecuting investor class actions and extensive experience in actions
involving financial fraud.
Milberg Weiss Bershad Hynes & Lerach LLP, a 170-lawyer firm with offices in
New York, San Diego, San Francisco, Los Angeles, Boca Raton, Seattle and
Philadelphia, is active in major litigations pending in federal and state
courts throughout the United States. Milberg Weiss has taken a leading role
in many important actions on behalf of defrauded investors, consumers, and
companies, as well as victims of World War II and other human rights
violations, and has been responsible for more than $30 billion in aggregate
recoveries. The Milberg Weiss website (http://www.milberg.com) has more
information about the firm.