A class action lawsuit has been commenced in the United States District Court for the Western District of Pennsylvania on behalf of all purchasers of FreeMarkets, Inc. common stock between 24 July 200…
A class action lawsuit has been commenced in the United States District Court for the Western District of Pennsylvania on behalf of all purchasers of FreeMarkets, Inc. common stock between 24 July 2000 and 23 April 2001, inclusive. The complaint charges that defendants violated certain sections of the Securities Exchange Act of 1934. The complaint alleges, among other things, that the defendants issued a series of false and misleading press releases concerning FreeMarkets“ financial condition and business prospects. Specifically, the complaint alleges that FreeMarkets failed to properly account for a warrant that it had provided to one of its largest customers, Visteon Corp., during the period in question. Moreover, the company is charged with improperly accounting for its financial results for the second, third and fourth quarters of 2001 and for the entire fiscal 2000, thereby inflating its actual revenues and earnings. As a result, the price of the common stock was artificially inflated throughout the period in question, allowing the defendants to collectively sell millions of dollars worth of shares in personally held FreeMarkets common stock. However, on 23 April 2001, FreeMarkets revealed that Securities and Exchange Commission (SEC) staff had informed the company that its payments from Visteon should not be classified as revenue, but as money paid for the warrant. As a result, absent an appeal to the full SEC, the company said it would amend its financial statements to eliminate all the revenue it had received from Visteon during this period. The plaintiff seeks to recover damages on behalf of himself and all other individual and institutional investors who purchased or otherwise acquired FreeMarkets securities between 24 July 2000 and 23 April 2001, excluding the defendants and their affiliates. The plaintiff is represented by Faruqi & Faruqi, LLP, a law firm with extensive experience in prosecuting class actions, as well as significant expertise in actions involving corporate fraud.