Plaintiff, for its Complaint herein, based upon investigations performed by its counsel, alleges the following on information and belief, except as to the allegations with respect to its present ownership and its prior purchase of the common stock of the defendant MICRO WAREHOUSE, INC. and the allegations with respect to counsel retained by the plaintiff in this action, which it alleges on personal knowledge.

1. The plaintiff is an Institutional Investor and a Public Pension Fund of the State of Louisiana which invests funds for the payment of pensions to retired parties employed by the State of Louisiana and agencies thereof and pays pension benefits to its retirees.

2. The plaintiff also has the powers of a Louisiana Corporation and its Office and Place of Business is located at 8401 United Plaza Boulevard, Baton Rouge, Louisiana 70804.

3. The plaintiff, during the "Class Period" hereinafter set forth in this Complaint, purchased the common stock of the defendant MICRO WAREHOUSE, INC. as follows:

DATE OF PURCHASE  NUMBER OF    PURCHASE        TOTAL PURCHASE
OF SHARES         SHARES       PRICE PER       PRICE
                  PURCHASED    SHARE         
-------------------------------------------------------------

Nov. 8, 1995      18,000       $54.0625        $ 973,125.00
Nov. 14, 1995      8,000       $51.125         $ 409,000.00 
Dec. 1, 1995      12,500       $47.875         $ 598,437.50 
Feb. 5, 1996      10,000       $38.375         $ 383,750.00
Feb. 6, 1996      10,000       $36.8690        $ 368,690.00  
Feb. 6, 1996       5,000       $37.25          $ 186,250.00
Feb. 26, 1996     18,500       $41.25          $ 763,125.00
April 10, 1996    14,500       $39.25          $ 569,125.00
April 23, 1996    12,000       $37.73          $ 452,760.00
June 12, 1996     20,000       $24.00          $ 480,000.00
July 26, 1996      8,551       $17.25          $ 147,504.75
July 29, 1996      4,453       $17.678601      $  78,722.81

TOTAL PURCHASE PRICE FOR SHARES
DURING CLASS PERIOD                            $5,410,490.06

4. No sales of the aforesaid stock were made by the said plaintiff during the aforesaid Class Period.

5. The defendant MICRO WAREHOUSE, INC. is a corporation duly organized and existing under the laws of the State of Delaware. It has its principal office and place of business at 535 Connecticut Avenue, Norwalk, Connecticut 06854 within the territorial jurisdiction of this Court.

6. The defendant ERIC FURMAN, during the period of time set forth in this Complaint, was the corporate comptroller and Chief Accounting Officer of the defendant MICRO WAREHOUSE, INC.

7. The defendant PETER GODFREY, during the period of time set forth in this Complaint, was the Chairman of the Board of Directors, and Chief Executive Officer of the defendant MICRO WAREHOUSE, INC.

8. The defendant STEVEN PURCELL, during the period of time set forth in this Complaint, was the Vice-President of Finance, Chief Financial Officer and Treasurer of the defendant MICRO WAREHOUSE, INC.

9. Jurisdiction of this Court with respect to this Count is based upon the provisions of Section 27 of the Securities and Exchange Act of 1934, (15 USC 78aa) since this action is a suit for damages pursuant to Section 10(b) of the Securities and Exchange Act of 1934, (15 USC 78(b), and Rule 10b-5 promulgated in accordance with the above Statutory Section and upon Section 20 of the Securities and Exchange Act of 1934 (15 USC 78t).

10. The venue of this action is properly laid in this district because (1) the principal place of business of the corporate defendants is located in this district, (2) the individual defendants either reside or have their principal places of business in this district, (3) many of the wrongful acts charged against said defendants in this Complaint, which included the dissemination of false and misleading public statements, occurred from this district and (4) purchases of the common stock of the defendant, involved in this litigation, took place in this district.

11. In connection with the wrongful acts alleged in this Complaint the defendants, either directly or indirectly, utilized various means and instrumentalities of interstate commerce including, but not limited to, the mails, and telephonic and other means of wire transmission.

12. In addition to the above, in connection with the wrongful acts alleged in this Complaint, the defendants utilized the facilities of a National Securities Exchange.

13. Because of the management positions held by the individual defendants herein, including their membership on the Board of Directors of the defendant MICRO WAREHOUSE, INC., as well as their ability to substantially benefit by an unlawful inflation of the market price of the stock of MICRO WAREHOUSE, INC., these defendants are liable under Section 20(a) of the Securities and Exchange Act of 1934 as "controlling persons" of the defendant MICRO WAREHOUSE, INC. since, by virtue of their executive positions, their knowledge and involvement in the business of the defendant MICRO WAREHOUSE, INC. their membership in the Board of Directors of MICRO WAREHOUSE, INC. their stock ownership of a controlling position in the stock of MICRO WAREHOUSE, INC. and their power and ability to make public statements on behalf of the defendant MICRO WAREHOUSE, INC. to its stockholders, to potential investors in the common stock of the defendant MICRO WAREHOUSE, INC. and to the media, or any of the above powers.

14. The individual defendants herein are likewise personally liable for the acts of wrongdoing alleged in this Complaint because they utilized their power and influence over the defendant MICRO WAREHOUSE, INC. to cause said defendant to engage in the aforesaid wrongful acts.

15. Because the individual defendants consciously, deliberately and/or recklessly participated and joined in the wrongful acts alleged in this Complaint, they are individually liable as a matter of law as direct participants and their positions as corporate officers and director do not insulate them from the wrongs involved.

16. In addition, because the individual defendants personally engaged in the aforesaid wrongful acts, and personally profited therefrom, they are not immune from personal liability with respect thereto.

17. During the "class period" as set forth in this Complaint, the defendants, individually and in concert, engaged in a plan, scheme and course of conduct, pursuant to which they knowingly and/or recklessly engaged in acts transactions, practices and courses of business which operated as an actual or constructive fraud upon the plaintiff and the other members of the Class and made various untrue statements of material fact and/or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. These statements were made in reports filed with the Securities and Exchange Commission and were actually or constructively relied upon by the plaintiff and the other members of the Class in making their decision to purchase the securities of the defendant MICRO WAREHOUSE, INC. These statements were made by the defendants for the purpose of inducing the plaintiff and the other members of the class involved to purchase the common stock of MICRO WAREHOUSE, INC. and to inflate the market price of such stock.

18. Each of the defendants participated in and joined the alleged scheme and course of conduct specified above and each is liable primarily for the aforesaid wrongful acts and statements specified above.

19. By reason of the foregoing, and as specifically set forth hereinafter in this Complaint, the defendants violated Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in that they, or parties that they controlled, either (a) employed devices, schemes and artifices to defraud, or (b) made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, or (c) engaged in acts, practices, and a course of business which operated as a fraud or deceit upon the plaintiff and other members of the Class in connection with their purchases of the common stock of the plaintiff during the class period, or engaged in all of the foregoing illegal acts.

20. As a result of the wrongful acts committed by the defendants, as will be set forth specifically hereinafter in this Complaint, the market price of the common stock of MICRO WAREHOUSE, INC. was artificially inflated during the class period. The plaintiff and the other members of the class purchased the common stock of MICRO WAREHOUSE, INC. in ignorance of the false and misleading information supplied by the defendants. Furthermore the plaintiffs and the other members of the class relied on the integrity of the market both as to the public market price of such common stock of the defendant MICRO WAREHOUSE, INC. and as to their decision to purchase the said common stock of the said MICRO WAREHOUSE, INC.

21. The public market for the common stock of MICRO WAREHOUSE, INC. was, during the class period, an efficient public market for the purchase and sale of the common stock of the defendant MICRO WAREHOUSE, INC. Thus, during such class period the common stock of the defendant MICRO WAREHOUSE, INC. was listed on the NASDAQ over-the- counter public market, the public quotations for the said common stock were listed in the press, and a large number of shares of such common stock changed hands. Also, during the class period, there were 34,000,000 shares of the common stock of MICRO WAREHOUSE, INC. issued and outstanding.

22. The plaintiff brings this suit in behalf of a class pursuant to Rule 23 of the Federal Rules of Civil Procedure and the following paragraphs set forth the requisite class allegations.

23. The class consists of all persons who purchased the common stock of the defendant MICRO DEVICES during the period of time commencing on March 20, 1995 and continuing to September 27th, 1996. Excluded from the class are the corporate defendant, the individual defendants, the members of the immediate families of the individual defendants, and any other entity, including, but not limited to, trusts, powers and estates in which any of the defendants have a controlling position or a substantial interest and the heirs, assigns, legal representatives or successors of any excluded party.

24. The plaintiff is a member of this class.

25. The number of members of this class are not known with particularity however, during the "class period" there were approximately 34,000,000 shares issued and outstanding and the common stock of MICRO WAREHOUSE, INC. had an active market and was listed on the NASDAQ over-the- counter exchange the members of the class are so numerous that joinder of all of the members of the class is impracticable.

26. The plaintiff is unaware of the precise number of the members of the class involved, which can only be determined by discovery since this information in within the knowledge of third parties. It is estimated that the number of members of the class are at least in the hundreds and these class members are geographically distributed in various states of the United States and/or its territories and possessions.

27. The claims of the plaintiff are typical of the claims of the members of the class since the plaintiff purchased shares of the defendant MICRO WAREHOUSE, INC. on the NASDAQ over-the-counter market during the "class period" as did the other members of the class.

28. Plaintiff will adequately represent the class and its counsel are experienced in securities class litigation.

29. A class action is superior to other available remedies for the fair and efficient adjudication of this controversy. The alternative of a plurality of separate actions by class members is completely inappropriate and would be an inefficient use of judicial resources. For those class members who have small claims the alternative of a separate suit is non-existent.

30. There are common questions of law or fact applicable to all of the members of the class and some of the common questions are the following:

a. Have the defendants, jointly and severally, violated the Securities Acts of the United States.

b. Have the defendants directly or indirectly participated in and pursued the acts complained of herein.

c. Were the various public statements as set forth hereinafter in this Complaint false and misleading or did the defendants fail to disclose sufficient facts which, at the time that they were made, required to be disclosed to make the statements not misleading.

d. Did the defendants, in connection with the claims set forth in the Complaint, act wilfully, recklessly or negligently.

e. Were the market prices of the common stock of MICRO WAREHOUSE, INC. artificially inflated during the class period by reason of the claims set forth in the Complaint.

f. Did the members of the class sustain damages because of the wrongful acts set forth in the Complaint and, if so, what is the proper measure of damages.

31. There is no difficulty in the management of this litigation as a Class Action.

32. The identity of the members of the class can be easily obtained from the stock transfer records of the defendant MICRO WAREHOUSE, INC. Appropriate notice can be given to the record holders of such stock by mail. Where the stock is beneficially owned by such record owner, such record owner can be directed to give notice to each of said beneficial owners that it represents.

33. The plaintiff is well qualified to be a "lead plaintiff in the above-entitled action because it is a public pension fund sustaining a large and substantial loss by reason of the wrongful acts set forth in this Complaint. In addition to having retained outside counsel in this case it also maintains its own legal department and also has other legal resources available to assist it in this suit.

34. In 1987 the defendant MICRO WAREHOUSE, INC. commenced operations as a Connecticut corporation. This corporation was re-incorporated in Delaware on October 1, 1992 which is prior to the commencement of the class period set forth in this Complaint.

35. The business of the defendant MICRO WAREHOUSE, INC. is the sale and distribution of various products relating to computer hardware and computer software. This defendant does not manufacture any of its own products but obtains these products from approximately 2,000 vendors. Many of these vendors are well known manufacturers such as, for example, Apple, Claris, Daystar, Farallon, Hayes, Hewlett-Packard, IBM, Lotus, Microsoft, Quark, Symantic [sic], and Texas Instruments.

36. Because MICRO WAREHOUSE, INC. is a direct seller of the above products to the public it can offer these products at discounts ranging from 10% to 60% below the manufacturers suggested retail prices.

37. In order to obtain customers for its products it utilizes targeted mailings of its catalogs to prospective customers about 12 times a year. These catalogs have detailed descriptions and specifications of its products and, in many cases, full color pictures thereof. Various new products are set forth in each of its catalogs. Not only does it sell its products through targeted mailings but is also employs a telemarketing sales force to sell its products to commercial, governmental and educational accounts.

38. The emphasis of MICRO WAREHOUSE has purportedly been, since 1988, to expand its core businesses by attracting new customers and increasing sales to existing customers.

39. MICRO WAREHOUSE, INC. as a public company under the supervision of the Securities and Exchange Commission, filed its Form 10-k report with the Securities and Exchange Commission on or about March 20, 1995. This report covered the fiscal year ending December 31, 1994. This form was signed by each of the individual defendants who thereby warranted the accuracy thereof. This Form 10-K also incorporated, as part thereof, the 1994 Annual Report of MICRO WAREHOUSE, INC.

40. The aforesaid 10-K report contained the following information for MICRO WAREHOUSE, INC. for the time period of the report:

a. Current Assets b. Total Assets c. Stockholders' Equity

: $248,800,000 : $294,000,000 : $239,600,000

41. The report contained the following income statement for the time period of the report.

a. Earnings b. Earnings per share c. Gross Profit

: $28,000,000 : $1.01 : $149,700.000

42. This information contrasted with 1993 reported earnings of $14,900,000 which amounted to $.64 per share.

43. in the aforesaid report the defendant MICRO WAREHOUSE, INC. attributed its claimed "significant growth" as set forth in the aforesaid report, to expansion of its core business and to international expansion.

44. The aforesaid 10-K report was signed by the defendants GODFREY and PURCELL, who, by doing so, warranted the accuracy of such report.

45. The accuracy of the above statement was also certified to in the aforesaid 1994 Annual Report of MICRO WAREHOUSE, INC. which contained the following statement:

" * * * The financial data in this report, including the audited financial statements have been prepared by management using the best available information and applying judgment. Accounting principles used in preparing the financial statements are those that are generally accepted in the United States.

46. The aforesaid report also contained the following statement.

"In meeting our responsibility for the integrity of the financial statements, we maintain a system of internal controls designed to provide reasonable assurance that assets are safeguarded, that transactions are executed in accordance with management's authorization and that the accounting records provide a reliable basis for the preparation of the financial statements. Management has also established a formal Business Code of Ethics which is distributed throughout the Company. We acknowledge our responsibility to establish and preserve an environment in which all employees properly understand the fundamental importance of high ethical standard in the conduct of our business. * * * "

47. The aforesaid Form 10-K covering the fiscal year ending December 31, 1994 also contained the following statement.

" * * * The Company works closely with customers and vendors to assure that all vendor warranties and return privileges are fully honored. In 1994 the Company had a return rate of approximately 8.0% of total sales. Returns are received and processed as a segregated activity to maintain control over the returned product, to initiate the refund process and to obtain appropriate credit from suppliers. Return experience is closely monitored * * * " (emphasis supplied).

48. The aforesaid Form 10-K covering the fiscal year ending December 31, 1994 also contained the following statement.

" * * * The Company's product review committee screens new products weekly and selects products for inclusion in its catalogs based on features, quality, sales trends, price margins and warranties. Through frequent mailings of its catalogs, the Company is able to quickly replace slower selling products with new products. In 1994, no single product accounted for more than 1% of the Company's net sales. Each edition of the Company's catalogs typically includes 100 to 150 new and updated products. * * * "

49. The aforesaid Form 10-K covering the fiscal year ending December 31, 1994 also contained the following statement.

" * * * Micro Warehouse purchases products from approximately 2100 Vendors. . . Typically the leading 100 products sold by the Company account for approximately 50% of its net sales. . . Micro Warehouse believes that its volume purchases enable it to obtain favorable product pricing. Many of the Company's suppliers make funds available to the Company in the form of advertising allowances and incentives to promote and increase sales of their products. Generally the Company has been able to return and unsold or obsolete inventory to its vendors through written agreements with, or unwritten policies of, such vendors. In addition the Company typically receives price protection should a vendor subsequently lower its price. (emphasis supplied).

50. The aforesaid Form 10-K covering the fiscal year ending December 31, 1994 also contained the following statement.

" * * * The Company has committed significant resources to the development of a sophisticated computer system which is used to manage all aspects of its business. The main computer system is comprised of a Hewlett-Packard 3000 Model 992/400, 980/400 and 980/200. This system supports telemarketing, marketing, purchasing, accounting, warehousing and distribution. The system allows the Company, among other things, to monitor sales trends, make informed purchasing decisions, provide product availability and order status information. Routine capacity enhancements will be made periodically, as the Company deems necessary.

51. Included in the Form 10-K for the fiscal year ending December 31, 1994 were purported financial statements setting forth the financial position of the Company.

52. The above statements were directly or constructively relied upon by the plaintiff and the other members of the Class involved in making their decisions to purchase the securities of MICRO WAREHOUSE, INC.

53. The above statements were materially false and misleading and/or failed to disclose sufficient facts, under the circumstances under which they were made, to make the statements not misleading. Thus, while the public purchasers of the common stock of MICRO WAREHOUSE, INC. were thus informed that the Company was expanding its business and was doing so profitably, in point and in fact the defendants knew, or recklessly disregarded the fact that the above statements were materially false and misleading. Thus, in fact, the Company's 1994 reported assets, the Company's reported stockholders' equity, the Company's reported gross profit, and the Company's reported earnings were overstated by the inclusion therein of fictitious amounts purportedly due from suppliers and vendors as compensation for defective inventory sold to the Company, fictitious amounts purportedly for "stock rotation", defined as amounts for product returns and exchanges, and fictitious amounts for "price protection", defined as amounts due pursuant to agreements with vendors to compensate the Company for price reductions by the vendors to the Company on merchandise which was previously reduced in price.

54. In point and in fact the amounts due from suppliers and vendors to MICRO WAREHOUSE, INC. were overstated by millions of dollars and, if similar overstatements made in 1995 are also added, totalled approximately $28,000,000. In addition the internal controls of MICRO WAREHOUSE, INC. were so inadequate that there was no assurance that the recording of the actual amounts due from suppliers and vendors was accurate.

55. The defendants, in addition, knew or recklessly disregarded the fact that their reported financial results were misstated.

56. As a result of the purported financial results so reported by the defendant MICRO WAREHOUSE, INC. the Dow Jones News Wire, on March 24, 1995, issued a favorable report on MICRO WAREHOUSE, INC. In this article it was stated that MICRO WAREHOUSE had reported sales for the year ending December 31, 1994 of $776,400,000 and net income of $28,000,00 and that this compared with sales of $450,400,000 in the comparable period in 1993 and net income for the 1993 period of $15,000,000. The article further reported that on April 14, 1994 MICRO WAREHOUSE, INC. had its first public offering of stock at $21.25 per share while the stock traded, at the time of the issuance of the article at $30.50 per share.

57. On May 11, 1995 defendant MICRO WAREHOUSE, INC. filed its Form 10-Q with the Securities and Exchange Commission covering the three months period ended March 31, 1995.

58. This report contained the following financial information:

a. Total Assets b. Current Assets c. Stockholders' Equity d. Gross Profit e. Total Earnings f. Earnings per share

: $317,500,000. : $268,500,000 : $249,800,000 : $ 52,400,000 : $ 9,900,000 : $ 0.33

59. The report contrasted these reported figures with reported earnings of $5,700,000 or $0.23 per share for the comparable period in 1994.

60. In the "Notes to Unaudited Consolidated Financial Statements contained in the aforesaid 10-Q report the defendants MICRO WAREHOUSE, INC. stated the following:

" * * * The consolidated financial statements include the accounts of Micro Warehouse, Inc. and its Subsidiaries ... and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission * * *"

61. In the "Notes to Unaudited Consolidated Financial Statements contained in the aforesaid 10-Q report the defendants MICRO WAREHOUSE, INC. further stated the following:

" * * * In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company operations and cash flows for the three months ended March 31, 1995 and 1994. * * *"

62. In point and in fact the aforesaid 10-Q report was materially false and misleading as follows:

a. The reported assets of the Company were overstated.

b. The reported stockholders' equity was overstated.

c. The gross profit of the Company was overstated.

d. The earnings of the Company were overstated.

63. The overstatement of these matters occurred because of the Company's inclusion therein of fictitious amounts purportedly due from suppliers and vendors for price protection, defective products, and product returns.

64. The effect of the above false statements was to boost the reported earnings of the defendant MICRO WAREHOUSE, INC. and to inflate the market price of the common stock of the Company. Thus, on June 16, 1996, the Dow Jones News Service reported that the market price of the common stock of MICRO WAREHOUSE, INC. was up 7% after climbing 8.8% the previous day. The publication further reported that analysts were stating that investors sense that the business of the Company was strong. It was further reported that the market price of MICRO WAREHOUSE shares was up by $1.75 per share, or 4.1% at $45.00 per share on NASDAQ value of 754,700 shares. The price of MICRO WAREHOUSE common stock had climbed $3.50 per share the previous day. It was further reported that a Micro Warehouse spokeswoman had stated that a sense that business is strong was probably behind the movement in the Company's shares.

65. On July 13, 1995 the Dow Jones News Service further reported a statement by Analyst Thomas Courtney of Montgomery Securities, Inc. to the effect that he expects MICRO WAREHOUSE, INC. to report earnings of 29 cents per share as compared with last year's reported earnings of 23 cents per share. The report quoted Courtney as saying:

"The computer direct marketers are having a very, very strong quarter."

66. On July 20, 1995 the Dow Jones News Service further reported that Micro Warehouse stated that its Macintosh Business rose 64% to $147,400,000 in the second quarter of 1995 and its PC/Windows business rose 60% to $76,500,000. The report further stated that Micro Warehouse had reported that its customer base reached three million during the second quarter of 1995, with 1,600,000 having placed an order within the last year, and that Micro Warehouse's circulation rose by 34% to more than 17.8 million catalogs.

67. On July 31, 1995 Barrons reported the following:

" * * * A sub-category of high-tech merchant . . . computer related catalog companies . . . also has enjoyed an exhilarating ride. Shares of Micro Warehouse, of Norwalk Connecticut, considered by many the class act of the group, increased more than 150% in the past 12 months; they finished Friday at a 62-week closing high of 51 1/4 upon 3/4 on the day. * * *"

68. The July 31 1995 Barrons report further stated the following:

" * * * Catalog marketers, or for that matter catalog stocks, are not necessarily in imminent danger of hitting rougher waters. Far from it . . . if anything, the group's basking in its own little paradise. Micro Warehouse's sales shot up by 72%, to $776,400,000, last year while net increased 87% to $28,000,000 and per share earnings 8% to $1.01 (on more shares outstanding). In this year's first six months, it reported earnings of $20,000,000 or 66 cents a share versus $12,000,000, or 46 cents in last year's like stretch. According to First Call estimates, analysts expect Micro Warehouse to earn $1.39 per share for the full year, and $1.39 a share for the full year, and $1.79 in '96.* * *"

69. The July 31 1995 Barrons report further stated the following:

" * * * Micro Warehouse is trading at 37 times 1995 estimates and 28 times next year's likely net income.* * *"

70. The high price-earnings multiple of this stock was based primarily upon the pattern of purported earnings growth and future prospects for higher earnings.

71. On August 14, 1995, Micro Warehouse, Inc. filed its Form 10-Q report with the Securities and Exchange Commission for the three months quarterly period ending June 30, 1995. This report was signed by the defendant PURCELL. In this Form 10-Q report the following financial information was set forth for the period:

a. Total Assets b. Current Assets c. Net Income d. Net Income Per Share for the three month period ending June 30, 1995 $10,000,000.

: $ 318,000,000 : $ 253,000,000 : $ 10,000,000 : $ 0.33

72. These reported results contrasted with the reported net income of $6,300,000 or $0.23 per share for the same period in 1994.

73. Micro Warehouse further reported the following financial results for the six months period ending June 30, 1995 as follows:

Total Assets b. Current Assets c. Stockholders' Equity d. Net income e. Net income per share f. Gross Profit

: $318,000,000 : $253,000,000 : $260,500.00 : $19,000,000 : $0.66 : $53,000.00

74. Micro Warehouse contrasted these results with the results for the six month comparable period in 1994 which were the following:

a. Net income b. Net income per share

: $12,000,000 : $0.46

75. In the "Notes to Unaudited Consolidated Financial Statements" contained in the aforesaid 10-Q report the defendants MICRO WAREHOUSE, INC. stated the following:

" * * * The consolidated financial statements include the accounts of Micro Warehouse, Inc. and its subsidiaries ... and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission * * *"

76. In the "Notes to Unaudited Consolidated Financial Statements" contained in the aforesaid 10-Q report the defendants MICRO WAREHOUSE, INC. further stated the following:

" * * * In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company at June 30, 1995 and the results of operations and cash flows for the six months ended June 30, 1995.* * *"

77. In addition, in the aforesaid Form 10-Q report Micro Warehouse, Inc. there was certain material included in the portion of the 10-Q report entitled "Management's Discussion and Analysis of Financial Condition and Results of Operation." In this portion of the said 10-Q report Micro Warehouse stated that it had experienced significant growth in its customer list, catalog mailings, sales and operating profitability since its organization in 1987.

78. The aforesaid Form 10-Q was materially false and misleading because it materially overstated the assets of the Company, its stockholders' equity, its gross profit, and its earnings. The said Micro Warehouse failed to disclose that while it had reported an increase in earnings for the 1995 period as compared with its earnings for a similar period in 1994, it failed to disclose that a material amount of the purported "increased earnings" was due to the Company's overstatement of amounts due from suppliers and vendors and that this overstatement amounted to at least $1,000,000. If overstatements in other periods in 1994 are also included these overstatements are believed to total approximately $18,000,000.

79. On October 3, 1995 the defendant MICRO WAREHOUSE, INC. filed a Registration Statement with the Securities and Exchange Commission covering the offering of 2,200,000 shares of common stock at an offering price of $44.50 per share. Of this offering 1,000,000 of these shares were being sold by the defendant GODFREY and by one PETER DENNIS, who was a director of the Company, with the balance of the shares to be sold by the Company.

80. This prospectus incorporated by reference the information contained in the two 10-Q reports of the Company for the quarters ended March 31, 1995 and June 30, 1995.

81. The information contained in the aforesaid prospectus was materially misleading for the reasons set forth in this Complaint including various misstatements of income and earnings.

82. On November 13, 1995 the defendant Micro Warehouse, Inc. filed its quarterly report for the third quarter of 1995 on Form 10-Q pursuant to the requirements imposed by the Securities and Exchange Commission. The report was signed by the defendant PURCELL.

83. In this quarterly report for the quarter ending September 30, 1995 the following cumulative financial information was set forth for the Company.

a. Total Assets b. Current Assets c. Stockholders' Equity

: $355,000,000 : $284,600,000 : $274,600,000

84. In the aforesaid report the defendant MICRO WAREHOUSE, INC. reported the following information for the aforesaid three month period:

a. Net Income b. Net Income Per Share

: $11,000,000 : $0.37

85. MICRO WAREHOUSE further reported that the above figures contrasted with net income of $6,900,000 or $0.25 per share for the comparable period in 1994.

86. For the nine month cumulative time period ended September 30, 1995 MICRO WAREHOUSE reported net income of $31,000,000 or $1.04 per share as contrasted with net income of $19,000,000 or $0.71 per share for the comparable time period in 1994.

87. For the reasons hereinbefore set forth in this Complaint, with respect to the From 10-Q report for the second quarter of 1995, the report was materially false and misleading.

88. The purported "impressive results" for Micro Warehouse, Inc. were commented on in Investors' Business Daily. On November 24, 1995, Investors Business Daily described Micro Warehouse, Inc. reported third quarter results and further stated that sales were surging with demand and office computers.

89. On or about December 22, 1995, the defendant MICRO WAREHOUSE, INC. filed a Registration Statement on Form S-4, together with amendments thereto, with the Securities and Exchange Commission. This Registration Statement was signed by the defendant GODFREY as "attorney in fact" for the defendants PURCELL, FURMAN and others. The Registration Statement related to a special meeting of the shareholders of the INMAC CORP. to consider and act upon a merger agreement which merged INMAC into MICRO WAREHOUSE, INC. and exchanging INMAC shares of stock for shares of stock in MICRO WAREHOUSE, INC. The exchange was based upon the then current trading price range of MICRO WAREHOUSE common stock.

90. The Registration Statement, included descriptions of the business and operations of MICRO WAREHOUSE, INC. With respect to the purchasing practices of the Company, the following statement was made.

" * * *(Micro Warehouse) believes that its volume purchases enable it to obtain favorable product pricing. * * * (Micro Warehouse) has been able to return any unsold or obsolete inventory to its vendors though written agreements with, or unwritten policies of, such vendors. In addition (Micro Warehouse) typically receives price protection should a vendor subsequently lower its price. * * *"

91. The Registration Statement, also included descriptions of the products and merchandising of MICRO WAREHOUSE, INC. and read in part as follows:

" * * * (Micro Warehouse's) product review committee screens new products weekly and selects products for inclusion in its catalogs based on features, quality, sales trends and warranties. Through frequent mailings of its catalogs, (Micro Warehouse) is able to quickly replace slower selling products with new products. * * *"

92. The Registration Statement also included the purported financial statements of MICRO WAREHOUSE, INC. for the quarterly period ending September 30, 1995 and for the prior nine month period also ending on September 30, 1995.

93. These statements were false and misleading for the same reasons as previously set forth in this Complaint.

94. The INMAC sale of the Company to MICRO WAREHOUSE, INC. was approved by the stockholders of INMAC as reported by the Dow Jones News Service on January 25, 1996. The transaction was completed with each of the shares of INMAC stock was converted into 0.276 shares of MICRO WAREHOUSE common stock.

95. In March 1996 Micro Warehouse filed its annual report for the fiscal year ended December 31, 1995 on Form 10-K as required by the Rules of the Securities and Exchange Commission. This report was signed by the individual defendants on behalf of Micro Warehouse, Inc.

96. The Form 10-K also incorporated by reference the 1995 Annual Report of Micro Warehouse, Inc. In the financial information contained in said 10-K report the following was stated:

a. Net Income for 1995 b. Net Income per share c. Current Assets d. Total Assets e. Stockholders' Equity f. Gross Profit

: $45,000,000 : $1.48 : $345,000,000 : $416,000,000 : $339,000,000 : $239,700,000

97. This contrasted with the reported figures for the corresponding period in 1994 which were the following:

a. Current Assets b. Total Assets c. Stockholders' Equity d. Earnings e. Earnings per share f. Gross Profit

: $248,800,000 : $294,000,000 : $239,600,000 : $28,000,000 : $1.01 : $149,700.000

98. The following statement appeared in the 1995 Annual Report on form 10-K.

" * * * The financial data in this report, including the audited financial statements have been prepared by management using the best available information and applying judgment. Accounting principles used in preparing the financial statements are those that are generally accepted in the United States.

99. The following statement also appeared in the 1995 Annual Report on form 10-K.

In meeting our responsibility for the integrity of the financial statements, we maintain a system of internal controls designed to provide reasonable assurance that assets are safeguarded, that transactions are executed in accordance with management's authorization and that the accounting records provide a reliable basis for the preparation of the financial statements. Management has also established a formal Business Code of Ethics which is distributed throughout the Company. We acknowledge our responsibility to establish and preserve an environment in which all employees properly understand the fundamental importance of high ethical standard in the conduct of our business.* * *"

100. The aforesaid Annual Report on Form 10-K for the fiscal year ending December 31, 1995 included a statement to the effect that the said Micro Warehouse, Inc. was the "leading direct marketer of brand name Macintosh and IBM compatible personal computers, software, accessories and peripherals."

101. The aforesaid Annual Report on Form 10-K for the fiscal year ending December 31, 1995 included a statement to the effect that the said Micro Warehouse, Inc. was expanding internationally and had acquired California-Based INMAC CORP. in January 1996.

102. The aforesaid Annual Report on Form 10-K for the fiscal year ending December 31, 1995 included a discussion of its management information systems to insure accurate reporting of the results of operations, earnings, etc. This statement read as follows:

"* * * The Company has committed significant resources to the development of a sophisticated computer system which is used to manage all aspects of its business. The main computer system is comprised of a Hewlett-Packard 3000 Model 992/400, 980/400 and 980/200. This system supports telemarketing, marketing, purchasing, accounting, warehousing and distribution. The system allows the Company, among other things, to monitor sales trends, make informed purchasing decisions, provide product availability and order status information. During 1994 and 1995, the Company made significant installations and upgrades to all its computer systems including systems in its international operations at an approximate cost of $10 million and $6.5 million respectively. . ...Routine capacity enhancements will be made periodically, as the Company deems necessary.

103. The aforesaid Form 10-K was materially false and misleading because the defendants knew or recklessly disregarded the fact that the 1995 reported assets, stockholders' equity, gross profit and earnings were artificially inflated by the improper accounting treatment of the amounts due from suppliers and vendors for defective inventory sold to the company, by improper accounting treatment for product returns and exchanges, for improper accounting treatment of amounts purportedly due from vendors and suppliers to compensate Micro Warehouse for price reductions made by said vendors and suppliers for merchandise in the Company's inventory. By reason of the above the Company's reported assets, stockholders, equity, gross profit and earnings for 1995 were overstated by the Company's inclusion of fictitious amounts purportedly due from suppliers and vendors. These overstatements amounted to millions of dollars, which, including similar overstatements made in 1994, totalled approximately $18,000,000.

104. The Form 10-K report for 1995 was further false and misleading because, while the defendant Micro Warehouse, Inc. claimed that it had sophisticated computer systems to manage all parts of the Company's business, in point and in fact the Company's control systems were so inadequate that the Company lacked any reasonable assurance that the recording of amounts due from suppliers and vendors was reasonably accurate.

105. Thus the defendants, in any event, knew or recklessly disregarded the fact that their financial statements were misstated.

106. On March 27, 1996 the Wall Street Journal reported that Micro Warehouse would take a pretax charge of about 30 million dollars in the current quarter to cover the costs of restructuring associated with its recent acquisition of INMAC CORP.

107. On April 22, 1996 the Dow Jones News Service reported that Micro Warehouse reported better than expected earnings. It was further reported that analysts stated that Micro Warehouse is showing that business remains strong and that they can translate good sales trends into earnings gains with the held of efficient business models. The report further quoted Tom Courtney, an analyst of Montgomery Securities, Inc. as follows:

" * * * They are capitalizing on strong business trends and bringing it to the bottom line in the form of strong growth and improved earnings. This group of companies is focused on the corporate market, and the corporate market, as we see it through this channel, remains strong.* * *"

108. On April 23, 1996 Robertson Stephens & Company, an Investment Firm, issued a "buy" rating on Micro Warehouse, Inc. common stock as it commenced coverage of the said defendant. The rating, based upon the public information provided by the said defendant, was based upon the alleged earning momentum of the said defendant as well as the opportunities for the said defendant to provide for cost savings and synergies associated with the said defendant's acquisition of INMAC.

109. On or about May 14, 1996 the defendant MICRO WAREHOUSE, INC. filed its quarterly report for the quarter ended on March 31, 1996 with the Securities and Exchange Commission. The report was signed by the defendant PURCELL. In this report MICRO WAREHOUSE, INC. reported the following information.

a. Operating Income b. Current Assets c. Total Assets d. Stockholders' Equity

: $ 25,900,000 : $453,900,000 : $537,200,000 : $375,600,000

110. The defendant MICRO WAREHOUSE, INC. did set forth a charge against its operating income for the quarter ended March 31, 1996 for the costs related to the acquisition of INMAC relating to its restructuring and merger.

111. The report of operating income of $25,900,000 for the quarter ended March 31, 1996 contrasted with the report of operating income of $21,400,00 for the same period in 1995.

112. The following statement was made in the aforesaid 10-Q report for the quarter ended March 31, 1996.

" * * * The consolidated financial statements include the accounts of Micro Warehouse, Inc. and its subsidiaries ... and have been prepared without audit, pursuant to the rules and regulations of the Securities Exchange Commission * * *"

113. In the aforesaid 10-Q report the following additional statement was made.

" * * * In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company at March 30, 1996 and the results of operations and cash flows for the three months ended March 31, 1996 and 1995. * * *"

114. On June 5, 1996 the Dow Jones New Service reported that Micro Warehouse expected its second quarter and year net income to be below analysts estimates. It reported that, in a press release by Micro Warehouse, Inc., it was stated that, in the second quarter, the Company planned to write off about $6,000,000 of purported "goodwill" carried on the balance sheets of its MAC-only units in Australia, Denmark, Mexico, and Switzerland.

115. In explaining the lower net income, Micro Warehouse stated that this was due to continued weakness in the Apple Macintosh business of the Company.

116. This new did have a somewhat negative impact on investors since the market value of Micro Warehouse common stock declined from 34.3/4 on June 5, 1996 to 22 7/8 on June 5 1996.

117. Nevertheless on or about July 24, 1996 the Dow Jones News Service reported that analyst Marcia L. Aaron of Alex Brown & Sons raised her rating on Micro Warehouse, Inc. from neutral to buy. This increase of rating was based on the public reports of MICRO WAREHOUSE, INC. of its valuation and its improved earnings visibility.

118. However, it was obvious that the "insiders" of Micro Warehouse, Inc. were apparently aware of the material non-public adverse information relating to the market value of Micro Warehouse stock for the reasons set forth hereinabove. Thus from April 23, 1996 to April 30 1996 the insider officers and executives of Micro Warehouse, Inc. sold a total of 60,459 of the common stock of the company at prices from $42.35 to $44.00 per share.

115. On September 30, 1996. a stunning report was issued by the said defendant MICRO WAREHOUSE, INC. stating that it had discovered accounting errors which principally related to the amounts reported as due to the Company from suppliers and vendors for defective inventory, defective stock rotation and for price protection. The Company further reported that these errors would make the Company "likely to restate its financial results for 1994 and 1995". (emphasis supplied). Furthermore, while the Company stated that such alleged "accounting errors" did not affect its current operations, they could affect financial results for the third quarter of 1996 and for the 1996 year-end results. The Company further reported that as a result of having to restate its financial results for 1994 and 1995 it was likely to incur a charge of $18,000,000 after taxes, which charge amounted to approximately 25% of the Company's combined 1994 and 1995 reported income. The Company further reported that it believed that the errors occurred over several years and mainly involved years prior to 1996.

116. It is important to note that the estimate charge against earnings, which is approximately $18,000,000, was not based on any recent event, but, as set forth in the report of the Company on September 30, 1996, reflected problems which had purportedly occurred over several years. Therefore such facts were either known or should have been known to the Company and its management throughout the class period.

117. Based upon the report issued by the defendant MICRO WAREHOUSE, INC. on or about September 30, 1996, the market value of the Company's common stock dropped from a previous $31 1/2 per share on September 27th, 1996 to 25 3/4 a share on September 30, 1996 which constituted a decline of approximately 18%. The market value of the Company's stock dropped further on October 2, 1996 to 23.00 per share.

118. It is important to note that the adverse information was not based on any recent event but reflected problems which had occurred over several years. Thus these adverse facts were known, or should have been known during the entire "class period".

119. Based upon the report issued by the defendant MICRO WAREHOUSE, INC. analyst Marcia Aaron of Alex Brown & Company cut her rating on MICRO WAREHOUSE common stock from "buy" to "hold".

120. The Dow Jones News Service reported on September 30th, 1996 that analyst Ed Lee of Robertson Stephens Company downgraded the common stock of MICRO WAREHOUSE, INC. from "attractive" to "long term buy". The report quoted Lee as stating that "What it says is that they were not nearly as profitable as they thought".

121. Reportedly there was some speculation that MICRO WAREHOUSE, INC. may have accounted twice for some credits from vendors, or accounted twice for direct billings and credits against subsequent purchases.

122. On October 3, 1996 the Dow Jones News Service reported that the defendant GODFREY, who was the President of MICRO WAREHOUSE, was to be immediately replaced by a new president, LINWOOD LACEY, the previous Chief Executive of INGRAM MICRO, INC.

123. As a result of the acts of wrongdoing on the part of the defendants, as set forth hereinbefore in this Complaint, the defendants have generally violated the Securities Laws of the United States.

124. The defendants issued and participated in the issuance of materially false and misleading statements to the investing public. These representations were materially false and misleading when made in that they falsely stated or failed to disclose the following materially adverse facts about the operations of MICRO WAREHOUSE, INC. and its profitability. These statements were made as part of a plan and scheme to defraud public investors and to commit a "fraud on the market" in order to foster an illusion of the profitability and growth of MICRO WAREHOUSE, INC. and to inflate the market value of the common stock of the said Company. These statements were made in knowing or in reckless disregard of the truth by the defendants and further permitted the individual defendants and certain other insiders in the Company to dispose of their shares of common stock of MICRO WAREHOUSE, INC. at inflated prices.

125. The defendants falsely represented MICRO WAREHOUSE, INC.'s financial results and materially overstated the Company's assets, stockholders' equity, gross profit, and earnings.

126. The defendants falsely stated that MICRO WAREHOUSE, INC.'s financial statements were prepared in accordance with generally accepted accounting principles and in accordance with the requirements of the Federal Securities Laws and the regulations promulgated by the Securities and Exchange Commission.

127. The defendants falsely represented that MICRO WAREHOUSE, INC.'s internal controls were sophisticated and properly functioning when, in actuality, the Company's internal controls were so inadequate that the defendants lacked any assurance that the recording of amounts due from vendors and suppliers was reasonably accurate.

128. As a result of the improper accounting procedures of MICRO WAREHOUSE, INC. the reported financial results also violated Generally Accepted Accounting Principles, hereinafter set forth as GAAP, as issued by the Financial Accounting Standards Board, hereinafter set forth as FASB, as follows:

a. The FASB Statement of Concepts No. 1, paragraph 34, setting forth the principle that financial reporting should provide useful information to potential investors and creditors and other users in making rational investment, credit and similar decisions.

b. The FASB Statement of Concepts No. 1, paragraph 40, setting forth the principle that financial reporting should provide information about the economic resources of an enterprise, the claims against these resources, and the effects of transactions, events and circumstances that change these resources and the claims against these resources.

c. The FASB Statement of Concepts No. 1, paragraph 42, setting forth the principle that financial reporting should provide information about an enterprise's financial performance during a period. This is especially true where investors' investment and credit decisions are commonly based on evaluations of past enterprise performance.

d. The FASB Statement of Concepts No. 2, paragraphs 58 and 59, setting forth the principle that financial reporting should be reliable in that it should represent what it purports to represent.

e. The FASB Statement of Concepts No. 2, paragraph 79, setting forth the principle of completeness, which means that no information is omitted that may be necessary to ensure that it validly represents underlying events and conditions.

f. The Statement of Financial Accounting Standards No. 5 (Accounting for Contingencies,) setting forth the requirement of GAAP that an estimated loss shall be accrued by a charge to income when it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss or the impairment of the asset can be reasonably estimated. The above standard also requires that where it has been reasonably possible that such a loss or the impairment of the asset has been incurred, disclosure shall be made as to the nature of the contingency and an estimate of the loss or range of loss.

129. In exacerbation of the wrongful acts set forth hereinabove in this Complaint, various "insiders" in MICRO WAREHOUSE, INC. in possession of materially adverse non-public financial information, sold their shares of the common stock of MICRO WAREHOUSE, INC. into the public market during the class period at artificially inflated prices, reaping millions of dollars in unlawful profits which are required to be disgorged to those public stockholders who purchased such shares at such inflated prices as follows:

NAME OF INSIDER  DATE SOLD  NUMBER OF  SELLING PRICE TOTAL PROCEEDS
AND OFFICE HELD             SOLD       PER SHARE     TO INSIDER   
------------------------------------------------------------------

PETER GODFREY     5/4/95     50,000    $34.50        $ 1,725,000
Chairman of the
Board of
Directors,
President and 
Chief Executive
Officer

PETER GODFREY     7/26/95     5,000    $48.31        $   241,500

PETER GODFREY     7/27/95     7,500    $47.50        $   356,250
   
PETER GODFREY     7/28/95    37,500    $47.28        $ 1,773,000.00

ERIC FURMAN       7/31/95     8,500    $48.71        $   414.035.00
Corporate
Comptroller,
and Chief
Accounting 
Officer

STEVEN PURCELL    7/26/95     5,000    $48.83        $   244,150.00
Vice-President
Finance, Chief
Financial 
Officer and
Treasurer

STEVEN PURCELL    7/27/95    15,000    $47.50        $   712,500.00

STEVEN PURCELL    4/23/96    16,500    $42.35        $   698,775.00
 
BRUCE  LEV        7/26/95     2,500    $48.50        $   121,250.00
Vice-President     

BRUCE  LEV        7/27/95     2,500    $47.50        $   116,750.00

BRUCE  LEV        7/28/95    10,000    $47.28        $   472,800.00

FELIX  DENNIS     5/4/95     50,000    $34.50        $ 1,725,000.00
Director

FELIX  DENNIS     7/26/95     5,000    $48.31        $   241,550.00

FELIX  DENNIS     7/27/95     7,500    $47.50        $   356,250.00

FELIX  DENNIS     7/28/95    37,500    $47.28        $ 1,773,000.00 

POWELL CROWLEY    7/26/95     8,665    $47.00        $   407,255.00
Divisional
Officer

BYRON
SCHELLINKROUT
Vice-President    4/17/95     3,500    $32.75        $   114,625.00

BYRON             7/26/95       900    $47.00        $    42,300.00
SCHELLINKROUT

BYRON             8/6/96      3,500    $23.11        $    80,885.00
SCHELLINKROUT

GEORGE DAMICO     5/15/95     3,771    $38.25        $   114,240.75
Officer
     
GEORGE DAMICO     7/26/95     4,600    $47.00        $   216,200.00
 
GEORGE DAMICO     8/9/95      2,000    $50.50        $   101,100.00

GEORGE DAMICO     4/30/96     7,500    $43.03        $   322,725.00

DEBORAH COOPER    5/16/95     3,600    $35.00        $   126,000.00
Officer

DEBORAH COOPER    7/26/95       500    $47.00        $    23,500.00

DEBORAH COOPER    7/26/95     2,500    $47.00        $   117,500.00

DEBORAH COOPER    4/23/96     6,400    $42.35        $   271,040.00

DEBORAH COOPER    4/29/96     1,800    $44.00        $    79,200.00 

DEBORAH COOPER    4/29/96       759    $44.00        $    33,396.00

MARTIN GORDON     4/26/96     5,000    $43.88        $   219,400.00
Vice-President

MARTIN SEILER     5/3/95      5,000    $34.75        $   173,750.00
Executive Vice-
President, Chief
Operating Officer
and Director

MARTIN SEILER     5/4/95      5,000    $34.50        $   172,500.00 

MARTIN SEILER     7/26/95     2,500    $48.83        $   122,075.00 

MARTIN SEILER     7/27/95     7,500    $47.50        $   356,250.00

MARTIN SEILER     10/17/95   10,000    $45.13        $   451,300.00

MARTIN SEILER     4/25/96    17,500    $44.00        $   770,000.00

MARTIN SEILER     4/25/96     2,500    $44.25        $   110,625.00

MERLE MC INTOSH   4/23/96     2,500    $42.35        $   105,875.00
Vice-President

JEFFREY SHEAHAN   5/16/95     1,500    $37.75        $    56,625.00 
Divisional 
Officer

JEFFREY SHEAHAN   5/16/95     1,000    $37.75        $    37,750.00

JEFFREY SHEAHAN   8/11/95     6,000    $47.07        $   282,420.00

STEPHEN ENGLAND   5/15/95     5,046    $37.75        $   193,009.50
Divisional
Officer

STEPHEN ENGLAND   8/9/95      8,500    $50.50        $   429,250.00 

ADAM SHAFFER      5/16/95     5,000    $35.00        $   175,000.00 
Officer

ADAM SHAFFER      8/8/95      1,000    $49.25        $    49,250.00

ADAM SHAFFER      8/8/95      5,000    $49.25        $   246,250.00


Total profit received by insiders for sales based
on material non-public inside information            $17,005,056.00

130. Despite the fact that the above parties had access to non-public adverse confidential information as a result of their status as directors and/or officers of the defendant MICRO WAREHOUSE, INC., and their corresponding duty to disclose the adverse material facts and not to personally profit therefrom, they made the unlawful sales set forth hereinabove.

131. Plaintiff repeats and re-alleges the allegations set forth in paragraphs previously alleged in this Complaint as they apply to this Count.

132. This Court acquires jurisdiction of this Count pursuant to the diversity of citizenship of those plaintiffs having claims in excess of $50,000.

133. This Court acquires jurisdiction of the claims of the plaintiffs having claims less than $50,000 by reason of the fact that the present claim is a substantial and related claim to the claims for Securities Act violation set forth herein.

134. Defendants, in the course of their business, wilfully and/or negligently supplied and/or aided and abetted in supplying materially false information to the plaintiff and to the members of the class herein, and thus are subject to liability for the pecuniary loss caused to the plaintiff and to the class members by their justifiable reliance upon the information supplied.

135. The defendants, at a minimum, failed to exercise reasonable care and competence in obtaining and communicating such information to plaintiff and class members.

136. The plaintiff and said class members relied, either directly, indirectly or constructively upon the financial statements and the other statements made by the defendants as set forth hereinabove in this Complaint and suffered pecuniary losses by reason of such reliance. Said statements were made and published by the defendants with their reasonable knowledge that they would be so relied upon by the plaintiffs.

137. Defendants negligent misrepresentation thus breached a duty of care owed to the plaintiff and class members which proximately caused their pecuniary loss in connection with their purchases of the common stock of MICRO WAREHOUSE, INC. as will be established at the trial of this action.

Plaintiff demands a trial by jury of all issues in this action.

WHEREFORE PLAINTIFF DEMANDS:

1. That the TEACHERS RETIREMENT SYSTEM OF LOUISIANA be certified as the "lead plaintiff" in this action having suffered the greatest amount of loss over any other party seeking the status of "lead plaintiff".

2. That counsel retained by the said plaintiff be certified by this Court as "lead counsel" herein.

3. That this action be certified by this Court as a proper class action.

4. That the Court and a Jury award to the plaintiff and to all of the other members of the class set forth herein their compensatory damages in an amount to be determined by the Court and a Jury after trial.

5. That the plaintiff and all members of the class set forth herein be awarded their costs and expenses incurred in connection with this action.

6. That the plaintiff's attorneys be awarded reasonable attorneys' fees and expenses by this Court in the event that a successful result is obtained in this litigation.

7. That the plaintiff and the class herein be awarded such other, further and different relief as this Court may deem just and proper.