A New York City law firm said it has filed a federal class action suit against THINK New Ideas Inc. on behalf of shareholders.
The suit was filed by by the law firm of Faruqi & Faruqi in the U.S. District Court for the Southern District of New York on behalf of all purchasers of common stock between Nov. 14, 1997 and Sept. 21, 1998.
The complaint accuses THINK and certain officers and directors of violating federal securities laws. The suit claims that the defendants issued a series of false and misleading statements during the period in question and that they manipulated certain of the company’s asset and liability accounts in order to report increasing earnings and revenues.
As a result of these manipulations, the price of THINK’s common stock was inflated allowing defendants to complete acquisitions using the common stock as currency, according to the suit.
Attorney Lee Squitieri, a principal in another law firm involved, Abbey, Gardy & Squitieri,” told the Silicon Alley Reporter: “We have received hundreds of communications from stockholders seeking to join the suit.”
THINK isued a statement saying: “While we have not yet seen the formal complaint, based upon the information currently available we believe this lawsuit is without merit and we intend to defend vigorously against it.”
THINK stock closed yesterday at $6 7/16, down a half. Its 52-week high is $39.25. On Sept. 9, Prudential downgraded Think’s stock from accumulate to hold, according to the Reporter.