| Company: | Zale Corporation |
| Ticker Symbol: | NYSE: ZLC |
| Class Period: | February 18, 2005 to May 5, 2006 |
| Date Filed: | Aug-03-06 |
| Lead Plaintiff Deadline: | Sept-18-06 |
| Court: | Southern District, NY |
| Allegations: |
A class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all securities purchasers of Zale Corporation ("Zale" or the "Company") from February 18, 2005 to May 5, 2006, inclusive (the "Class Period").
The Complaint charges Zale and certain of its officers and directors with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company improperly timed vendor payments, thereby overstating its net cash flows and free operating cash flows; (2) that the Company skewed its true operational results by improperly accounting for extended service agreements, leases, and accrued payroll; (3) that the Company lacked adequate internal controls; (4) that the Company's financial statements were presented in violation of Generally Accepted Accounting Principles; and (5) that, as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On April 10, 2006, before the market opened, Zale shocked investors when it announced that the Company had received notice that the SEC was conducting a non-public investigation relating to various accounting and other matters related to the Company, including accounting for extended service agreements, leases, and accrued payroll. On this news, shares of Zale's stock dropped $2.64, or 9.5 percent, to close, on April 10, 2006, at $25.16 per share, on heavy trading volume. On May 5, 2006, after the market closed, Zale announced that defendant Mark R. Lenz ("Lenz"), the Company's Chief Financial Officer, had been placed on administrative leave. The Company reported that the decision was made after recent discussions with the Company's outside auditors that concerned Lenz's failure to timely disclose in conversations with the auditors that vendor payments scheduled to be made during the last two weeks of the Company's fiscal year ended July 2005 were delayed until the first week of August 2005, which was the start of a new fiscal year. On this news, shares of Zale's stock shed an additional $0.44, or 1.8 percent, to close, on May 8, 2006, at $24.18 per share. Zale's stock continued to fall the next day as investors absorbed the Company's announcement, losing $0.40, or 1.6 percent, to close, on May 9, 2006, at $23.78 per share.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The Complaint charges Zale and certain of its officers and directors with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company improperly timed vendor payments, thereby overstating its net cash flows and free operating cash flows; (2) that the Company skewed its true operational results by improperly accounting for extended service agreements, leases, and accrued payroll; (3) that the Company lacked adequate internal controls; (4) that the Company's financial statements were presented in violation of Generally Accepted Accounting Principles; and (5) that, as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On April 10, 2006, before the market opened, Zale shocked investors when it announced that the Company had received notice that the SEC was conducting a non-public investigation relating to various accounting and other matters related to the Company, including accounting for extended service agreements, leases, and accrued payroll. On this news, shares of Zale's stock dropped $2.64, or 9.5 percent, to close, on April 10, 2006, at $25.16 per share, on heavy trading volume. On May 5, 2006, after the market closed, Zale announced that defendant Mark R. Lenz ("Lenz"), the Company's Chief Financial Officer, had been placed on administrative leave. The Company reported that the decision was made after recent discussions with the Company's outside auditors that concerned Lenz's failure to timely disclose in conversations with the auditors that vendor payments scheduled to be made during the last two weeks of the Company's fiscal year ended July 2005 were delayed until the first week of August 2005, which was the start of a new fiscal year. On this news, shares of Zale's stock shed an additional $0.44, or 1.8 percent, to close, on May 8, 2006, at $24.18 per share. Zale's stock continued to fall the next day as investors absorbed the Company's announcement, losing $0.40, or 1.6 percent, to close, on May 9, 2006, at $23.78 per share.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
