The latest to join the class action bandwagon is Connecticut-based law firm Scott+Scott on behalf of Omnicom investors who bought shares in the company between April 25 2000 and June 11 2002.
Scott+Scott joins the many others now filing suits against Omnicom since a Wall Street Journal article on June 12 questioned Omnicom's accounting practices.
In response to the revelations in The Wall Street Journal article, the price of Omnicom common stock dropped precipitously, falling almost 20% to close at $62.28.
The latest suit, like some of those before it, names not only Omnicom, but also president and CEO John Wren, chief financial officer Randall Weisenburger, chairman Bruce Crawford and senior vice-president and controller Philip Angelastro.
The new suit follows the news broken in 北京赛车pk10 magazine yesterday that one of the world's largest credit insurance groups has threatened to remove its coverage of Omnicom transactions and deal a further blow to the company's reputation.
According to 北京赛车pk10, Omnicom executives spent this week in intense negotiations with Euler Trade Indemnity, after Euler warned it would withdraw the insurance coverage it offers to media owners dealing with Omnicom from this Friday. Such a move could expose media owners to losses in the unlikely event that Omnicom should fold.
According to Anthony Wreford, Omnicom's head of Diversified Agency Services Europe, 11th-hour negotiations by Weisenburger, Omnicom's chief financial, have convinced Euler to defer its decision until after Omnicom's half-year results next month.
The notification threatened to forestall the recovery that Omnicom's share price has achieved in the past few days.
According to the law firm, the complaint alleges that prior to and despite the overall economic slowdown and the worst decline in advertising revenue that the industry had ever experienced, Omnicom was continuing to experience growth in its revenues and earnings.
In its statement, the law firm said: "Omnicom's growth was attributed, for the most part, to the numerous acquisitions made by the company, which were accretive to the company's earnings. However, on June 12 2002, an article in The Wall Street Journal highlighted the company's acquisition accounting and raised questions concerning the company's creation of an off-balance-sheet entity in which it transferred certain internet investments."
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