RADNOR, Pa., Aug. 16 /PRNewswire/ — The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all common stock purchasers of IMAX Corporation (NASDAQ:IMAX) ("IMAX" or the "Company") from February 17, 2006 through August 9, 2006, inclusive (the "Class Period").
The Complaint charges IMAX 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 defendants improperly timed revenue recognition from theatres; (2) specifically, that the Company recognized revenue in the fourth quarter of 2005 from at least ten theatres before the theatres had opened; (3) that the Company sought to manipulate its financial results because it desired to attract entities interested in buying or merging with the Company; (4) that the Company’s financial statements were materially inflated; (5) that the Company lacked adequate internal controls; and (6) that the Company’s financial statements were presented in violation of Generally Accepted Accounting Principles.
On August 9, 2006, after the market closed, IMAX shocked investors when the Company announced that it was in the process of responding to an informal inquiry from the SEC regarding the Company’s timing of revenue recognition, including its application of multiple element arrangement accounting in its revenue recognition for theatre systems. On this news, shares of IMAX plummeted $3.90, or 40.5 percent, to close, on August 10, 2006, at $5.73 per share, on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country.
If you are a member of the class described above, you may, not later than October 10, 2006, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation.
In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org.