SOURCE: Shalov Stone Bonner & Rocco LLP

Shalov Stone Bonner & Rocco LLP

November 19, 2009 19:43 ET

Shalov Stone Bonner & Rocco LLP Announces Class Action Against Zale Corporation

NEW YORK, NY--(Marketwire - November 19, 2009) - Shalov Stone Bonner & Rocco LLP announces that a class action lawsuit has been filed on behalf of purchasers of the securities of the Zale Corporation ("Zale" or the "Company") (NYSE: ZLC) during the period between November 16, 2006 and October 29, 2009, inclusive (the "Class Period"). The lawsuit is pending in the United States District Court for the Northern District of Texas.

According to the complaint, during the Class Period defendants made false and/or misleading statements, and failed to disclose, among other things, the following material adverse facts: (i) that instead of recording certain advertising costs as an expense, Zale improperly recorded them as prepaid advertising; (ii) that Zale improperly accounted for intercompany accounts receivable associated with its wholly owned insurance subsidiaries; (iii) that as a result, Zale's financial results were overstated during the Class Period and were not prepared in accordance with Generally Accepted Accounting Principles; (iv) that Zale lacked adequate internal and financial controls; and, (v) that as a result of the foregoing, Zale's financial statements were materially false and misleading at all relevant times.

On October 29, 2009, the Company filed its Annual Report with the United States Securities and Exchange Commission (the "SEC") for the fiscal year ended July 31, 2009, containing restated financial information for fiscal 2008, 2009 and prior periods, to reflect certain accounting adjustments for advertising costs, intercompany accounts receivable, depository bank accounts, federal income taxes, and personal property taxes. Zale also disclosed that the SEC was investigating the accounting issues that led it to restate its earnings for 2008 and 2009. On this news, the price of Zale's shares fell almost 26%.

Shalov Stone Bonner & Rocco LLP has extensive experience in the prosecution of lawsuits on behalf of investors. For more information about the firm, please visit its website at:

If you purchased Zale securities and would like additional information about your rights, please contact investor rights attorney Amanda C. Scuder, at Shalov Stone Bonner & Rocco LLP, 485 Seventh Avenue, Suite 1000, New York, New York 10018 (telephone: (212) 239-4340; email:

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