NEW YORK -March 1, 2005 – LAWFUEL – The Law News Network –The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed today on behalf of all persons who purchased or otherwise acquired the securities of Mamma.com Inc. (“Mamma.com”) (Nasdaq: MAMA), between March 2, 2004 and February 16, 2005, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss’s website at: http://www.milbergweiss.com
If you purchased or otherwise acquired the securities of Mamma.com between March 2, 2004 and February 16, 2005, inclusive, and sustained damages, you may, no later than April 25, 2005, request that the Court appoint you as lead plaintiff. 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 Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action.
The action, Case No. 05-cv-2483, is pending in the United States District Court for the Southern District of New York against defendants Mamma.com, David Goldman (Executive Chairman), Guy Faure (President and CEO), and Daniel Bertrand (CFO and Executive Vice President). According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges that throughout the Class Period, Mamma.com, a provider of information retrieval through its metasearch engine, touted Mamma.com’s purported strong revenue and earnings growth, and otherwise strong financial performance in SEC filings and publicly disseminated press releases. In reaction to these positive statements, the price of Mamma.com common stock skyrocketed to as high as $17.49 per share in April of 2004 (from an average price of $2.95 during the year prior to the Class Period), with daily trading volume approximately 22 times greater than the average daily trading during the Class Period. The intense trading in the Company shares drew the attention of the Securities and Exchange Commission which commenced an investigation of the Company in or about April 2004. Defendants maintained throughout the Class Period that they were “confident that all information and disclosures are fully compliant with all applicable accounting practices and all SEC and other regulatory disclosure requirements” and that the “Company is not aware of any non-public information that might bear upon the recent activity in the market for the Company’s common stock.”
The truth began to emerge on January 11, 2005. On that date, The Globe and Mail published an article revealing that one of the targets of the SEC investigation was the notorious Canadian stock promoter, Irving Kott. According to the article, Kott’s checkered history included felony charges for concealing material facts from the SEC, criminal charges by Dutch regulators related to Kott’s involvement with a “boiler room” operation, and a guilty plea in an Ontario court for stock fraud. The article stated that the SEC requested information from Company executives and directors concerning any relations they may have had with Kott. On January 13, 2005, Mamma.com issued a press release confirming its previous announcement that the SEC had commenced an investigation, and assured investors that its officers, directors, and outside auditors were fully cooperating with the SEC. The truth emerged on February 16, 2005 when defendants announced that PricewaterhouseCoopers LLP had refused the Company’s 2004 audit engagement, and they admitted that someone had an undisclosed controlling interest in the Company and, although they still did not reveal the person’s identity, the context strongly suggested it was Kott. Upon recognizing that Kott and the defendants had used Mamma.com to perpetrate a classic “pump and dump” scheme, investors rushed to sell off their Mamma.com stock, which, in conjunction with the Company’s announcement that it would not be releasing its year 2004 audited financials, resulted in an afternoon trading halt of the Company’s stock. Upon resumption of trading later the same day, the shares continued to fall, and closed at $4.25, down $2.03, or 32% from the previous trading day’s closing price of $6.28. Defendants were motivated to engage in the fraudulent scheme to complete numerous acquisitions and a private placement of Mamma.com common stock and warrants to purchase Company stock for proceeds of $16.6 million.
Milberg Weiss Bershad & Schulman LLP (http://www.milbergweiss.com) is a firm with over 100 lawyers with offices in New York City, Los Angeles, Boca Raton, Delaware, Seattle and Washington D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm. 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 attorneys:
Steven G. Schulman
Peter E. Seidman
Andrei V. Rado
One Pennsylvania Plaza, 49th fl.
New York, NY 10119-0165
Phone number: (800) 320-5081