On October 17, 1997, a securities class action lawsuit was filed in the United States District Court for the Northern District of Texas, Civil Action No. 3-97-CV2563-P, on behalf of all persons who purchased or otherwise acquired the common stock of First USA Paymentech, Inc. (NYSE: PTI, “Paymentech” or the “Company”) between April 15, 1997 and September 24, 1997, inclusive (the “Class Period”).
The complaint alleges the Paymentech and certain officers and directors of the Company during the relevant time period violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by, among other things, misrepresenting material information concerning the Company’s revenues, earnings, net worth and prospects for growth.
In particular, the complaint alleges that Paymentech failed to disclose that at all relevant times the Company was experiencing a dramatic slowdown in sales due to its acquisition by a new majority owner, Banc One Corporation (“Banc One”) and that Company’s acquisition activity also slowed dramatically for the same reason. Banc One effectively became a majority owner of Paymentech when it agreed to acquire Paymentech’s then-majority owner First USA, Inc., in January 1997. The complaint also charges defendants with artifically inflating the Company’s reported financial results for its fourth fiscal quarter of 1997, the period ending June 30, 1997, by failing to timely write-down obsolete inventory and impaired asstes. The Company’s declining earnings, slowing growth and inflated net worth were effectively hidden from the market until September 24, 1997, when the Company admitted that it had materially overstated its asset value and earnings for the fourth quarter of 1997, that it would be revising and restarting those results, and that it would not meet analysts’ expectations for the first quarter of fiscal 1998. Because of the issuance of a series of false and misleading statements concerning Paymentech’s business and defendants’ concealment of matters regarding the deteriorating business of the Company, the price of Paymentech common stock was artifically inflated during the Class Period. During the time when certain material information was concealed from investors, officers of Paymentech sold large blocks of Paymentech stock at artifically inflated prices.
Plaintiff seeds to recover damages on behalf of class members and is represented in this action by the New York law firm of Wolf Popper LLP and the Texas law firm of Puls & Chambers, L.L.P. Wolf Popper has extensive experience representing shareholders in class actions and has successfully recovered billions of dollars for defrauded investors and shareholders. Its reputation and expertise in shareholder and other class action litigation has been repeatedly recognized by the courts.Details