Schatz & Nobel - Class Action Suit Against XM
 May 3, 2006 It would appear that another firm is getting involved in the case against XM. The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the District of Columbia on behalf of all persons who purchased or otherwise acquired the common stock of XM Satellite Radio Holdings, Inc. ("XM" or the "Company") (Nasdaq:XMSR) between July 28, 2005 and February 15, 2006, inclusive, (the "Class Period").
The Complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements. Specifically, defendants made misrepresentations regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. In reality, XM would be forced to spend extraordinarily large sums of money in the fourth quarter of 2005, in order to stay on track to achieve its stated goal. Despite defendants' knowledge that XM would be making those huge expenditures in the fourth quarter of 2005, defendants failed to disclose to the market that XM's cost of subscriber acquisition would rise to extraordinary levels, leading to huge increases in XM's net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting. During the Class Period, several key insiders of XM made huge sales of their personal taking advantage of the artificial inflation of XM's common stock.
On February 16, 2006, defendants issued a press release announcing XM's results for the fourth quarter 2005 and year 2005 results. In the release, they disclosed the truth about the skyrocketing level of XM's subscriber acquisition costs. On this news, XM's common stock fell 13% to close at $21.96 on February 17, 2006.
If you are a member of the class, you may, no later than July 3, 2006, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz & Nobel has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at sn06106@aol.com, or visit our website: www.snlaw.net. CONTACT: Schatz & Nobel, P.C.
Wayne T. Boulton
Nancy A. Kulesa
(800) 797-5499
sn06106@aol.com
www.snlaw.net
via Primezone 5/03/2006 01:00:00 PM
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