SOURCE: Abraham Fruchter & Twersky LLP

February 21, 2006 12:33 ET

Abraham Fruchter & Twersky LLP Announces Class Action Suit Against ProQuest Company

NEW YORK, NY -- (MARKET WIRE) -- February 21, 2006 -- Abraham Fruchter & Twersky LLP today announced that a class action lawsuit has been commenced in the United States District Court for the Eastern District of Michigan on behalf of purchasers of ProQuest Company ("ProQuest") (NYSE: PQE) common stock during the period between January 9, 2003 and February 8, 2006 (the "Class Period").

The complaint charges ProQuest and certain of its officers and directors with violations of the Securities Exchange Act of 1934. ProQuest publishes solutions for the education, automotive, and power equipment markets. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. As a result of defendants' false statements, ProQuest stock traded at artificially inflated prices during the Class Period, reaching a high of $37.89 per share on April 12, 2005.

Then, on February 9, 2006, prior to the market opening, the Company announced that it had discovered material irregularities in its accounting and would have to restate certain of its previously issued financial statements. As a result of the irregularities, the Company's deferred income and accrued royalty accounts were materially understated in previously issued financial statements and its prepaid royalty account was materially overstated. On this news, ProQuest's stock collapsed to as low as $21.90 per share, before closing at $24.19 per share on volume of 3 million shares, 13 times the average volume.

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company lacked requisite internal controls, and, as a result, the Company's projections and reported results were based upon defective assumptions and/or manipulated facts; and (b) the Company's financial statements were materially misstated due to its failure to properly defer income and royalty payments and its improper capitalization of royalty expenses, thereby overstating its revenue and income from at least 1999 to 2005.

Plaintiff seeks to recover damages on behalf of all purchasers of publicly traded securities of ProQuest during the Class Period (the "Class"). If you wish to serve as lead plaintiff, you must meet certain legal requirements set forth in the applicable law and file appropriate papers with the Court by April 11, 2006. You do not need to seek appointment as a lead plaintiff in order to share in any recovery. Under certain circumstances, one or more Class members may together serve as lead plaintiff. You may retain Abraham Fruchter & Twersky, LLP, or other counsel of your choice, to serve as your counsel in this action or you may choose to do nothing and remain an absent class member.

If you have any questions concerning this case or your rights or interests with respect to this matter, please contact plaintiff's counsel: Jack G. Fruchter, Esq. or Ximena Skovron, Esq. of Abraham Fruchter & Twersky, LLP, One Penn Plaza, Suite 2805, New York, New York 10119, by telephone at (212) 279-5050 or toll free at (800) 440-8986, by facsimile at (212) 279-3655, or by e-mail at jfruchter@aftlaw.com or xskovron@aftlaw.com.

Contact Information

  • CONTACT:
    Abraham Fruchter & Twersky, LLP
    Jack G. Fruchter, Esq.
    Ximena Skovron, Esq.
    One Penn Plaza
    New York, NY 10119
    1-800-440-986 (toll free)
    or 1-212-279-5050
    Or by e-mail at Email Contact