The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Northern District of Georgia on behalf of all common stock purchasers of CheckFree Corporation (NASDAQ: CKFR) (“CheckFree” or the “Company”) from April 4, 2006 through August 1, 2006, inclusive (the “Class Period”).
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [email protected] If you are a Class Member, you can view a copy of the Complaint or join this class action online at www.sbtklaw.com.
The Complaint charges CheckFree and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CheckFree is an electronic payment processing company which provides financial electronic commerce products and services. The Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts: (1) that the Company was experiencing a drastic downturn in its transaction growth; (2) that the Company lacked adequate internal and financial controls; and (3) that, as a result of the foregoing, the Company’s financial and operational projections were lacking in a reasonable basis when made.
Prior to and throughout the Class Period, CheckFree relayed to investors and analysts that the Company would maintain its consistent financial performance and impressive growth. It was projected that the Company would realize 25 percent annual transaction growth for the foreseeable future. The Company raised its expectations and performance projections for the fourth quarter of fiscal year 2006. Analysts and investors relied upon the Company’s projections, and shares of the Company’s stock increased in response to such positive statements from the Company. Analysts wrote research articles that conveyed how the Company “has masterfully managed investor expectations and effectively communicated the changes in its business model to the Street.” Citing Company statements, financial analysts projected that shares of the Company’s stock would reach over $60 per share in the near future.
However, on August 1, 2006, the Company shocked investors and financial analysts when it disclosed that its quarterly results for the fourth quarter of fiscal year 2006 were vastly below their forecasted projections for the quarter. As opposed to reaching the projected growth in key business segments, the Company actually reported a sequential decline. This news was disturbing to investors since the defendants had spoken to analysts in late April, and instead of disclosing the fact that the Company was experiencing a decline in the number of transactions that it processed, the defendants projected sequential growth for the quarter in all business segments. Rather than informing investors of the disappointing results that the defendants were actually realizing for the month of April, they withheld this information from investors until August 1, 2006.
On this news, shares of CheckFree declined $5.93 per share, or 13.75 percent, to close on August 2, 2006 at $37.20 per share, on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler, which has extensive experience in prosecuting investor class actions in both state and federal courts throughout the country.
If you are a member of the class described above, you may, not later than June 11, 2007, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin Barroway Topaz & Kessler or other counsel of your choice, to serve as your counsel in this action.
