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Wechsler Harwood LLP Files Securities Class Action Suit Against Mamma.com, Inc. -- MAMA
NEW YORK, March 9, 2005 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class action suit on behalf of all purchasers of the common stock of Mamma.com, Inc. ("Mamma.com" or the "Company") (Nasdaq:MAMA) from March 2, 2004 through and February 16, 2005, both dates inclusive (the "Class Period").
The action, entitled Scanga v. Mamma.com Inc., et al., Case No. (not yet assigned), is pending in the United States District Court for the Southern District of New York, and names as defendants, the Company, its Executive Chairman, David Goldman, and its President and Chief Executive Officer, Guy Faure. A copy of the Complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com.
The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the Complaint alleges that defendants issued a series of materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission during the Class Period. Mamma.com provides information retrieval on the Internet through its metasearch engine, www.mamma.com. The Company derives its revenues from two sources, including search services and banner advertising services, with customers located in the United States and Canada. According to the Complaint, the defendants failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that Irving Kott ("Kott"), a legendary Canadian stock promoter with a long history of stock manipulation, had a significant undisclosed interest in the Company; (2) that Kott and his associates were manipulating the Company's stock price by engaging in a classic "pump and dump" scheme to defraud; and (3) that the Company itself was manipulating its financial results in order to maintain its artificially inflated share price so that the "pump and dump" scheme would endure. Additionally, the Complaint alleges that during the Class Period, and with its stock trading at artificially inflated levels, the Company was able to acquire Digitalarrow LLC and High Performance Broadcasting Inc. (collectively "Digital Arrow") for $1,050,000 and the issuance of 90,000 common shares of Mamma.com, and was able to enter into a letter of intent ("LOI") whereby Mamma.com would acquire all of the shares of Copernic Technologies for a combination of cash and shares of Mamma.com. Moreover, the Company was able to raise $16.6 million through a private placement while its shares traded at artificially inflated levels.
Trading of Mamma.com shares was halted midday, February 16, 2005. Shortly thereafter, Mamma.com announced that it had been unable to reach an agreement on the terms of the audit engagement with PricewaterhouseCoopers LLP ("PWC") for the year ended December 31, 2004. Accordingly, PWC would not act as the Company's independent auditor for the audit of the Company's financial statements for the year ended December 31, 2004. News of this sent the stock into a downward spiral. Shares of Mamma.com fell $2.02 per share, or 32.27% to close at $4.25 per share.
If you are a member of the class described above, you may, not later than April 25, 2005 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 Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP
488 Madison Avenue, 8th Floor
New York, New York 10022
Toll Free Telephone: (877) 935-7400
Craig Lowther
Wechsler Harwood Shareholder Relations Department: clowther@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca
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