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Case Status:    SETTLED
On or around 04/28/2004 (Date of order of final judgment)

Filing Date: August 08, 2002

According to the Company’s Form 10-Q for the quarterly period ended February 28, 2004, on September 11, 2002, these actions were consolidated under the caption In re MSC Industrial Direct Co., Inc. Securities Litigation (CV No. 02 4422). On October 28, 2003, the parties entered into a Memorandum of Understanding to settle the matter for $1,250,000. On November 27, 2003, the parties filed a Stipulation and Agreement of Settlement. On March 16, 2004, the court held a settlement fairness hearing, approved the settlement, and dismissed the claims of the class with prejudice.

The complaint alleges that defendants issued materially false and misleading financial statements and press releases concerning MSM's revenues, income and earnings per share during the Class Period in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

Specifically, the complaint alleges that commencing with a January 11, 1999 press release and continuing throughout the Class Period, Defendants issued numerous statements and filed quarterly and annual reports with the Securities and Exchange Commission which described MSC’s net income and financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose the following adverse facts, among others: (i) that MSC had mis-stated its net income over a four-year period; (ii) that MSC had incorrectly accounted for inventory purchases; (iii) that MSC had incorrectly accounted for reserves and used reserves to “manage earnings”; and (iv) that as a result, the value of MSC’s net income and financial results were materially overstated at all relevant times during the Class Period.

The complaint further alleges that on August 5, 2002, MSC announced that it had discovered incorrect accounting entries associated with inventory purchases that overstated net income by approximately $8.3 million over the previous four years. Lead Plaintiff also alleged that the press release stated that MSC intended to restate its financial statements for fiscal years 1999, 2000, 2001 and year-to-date 2002, and that MSC expected that the restatement would reduce previously reported income by approximately $2.8 million in fiscal 1999, $4.2 million in fiscal 2000, $0.9 million in fiscal 2001 and $0.4 million in fiscal 2002. Lead Plaintiff further alleged that, upon this news, shares of MSC stock fell $4.99 per share to close at $10.51 per share, a one-day decline of 32%.

COMPANY INFORMATION:

Sector: Capital Goods
Industry: Misc. Capital Goods
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MSM
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. New York
DOCKET #: 02-CV-4422
JUDGE: Hon. Arthur D. Spatt
DATE FILED: 08/08/2002
CLASS PERIOD START: 11/04/1999
CLASS PERIOD END: 08/05/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley Geller, Bowman Coates & Rudman, LLP (Boca Raton, FL)
    One Boca Place. 2255 Glades Road, Suite 421A, Cauley Geller, Bowman Coates & Rudman, LLP (Boca Raton, FL), FL 33431
    561.750.3000 561.750.3364 ·
  2. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  3. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
No Document Title Filing Date
COURT: E.D. New York
DOCKET #: 02-CV-4422
JUDGE: Hon. Arthur D. Spatt
DATE FILED: 12/26/2002
CLASS PERIOD START: 01/11/1999
CLASS PERIOD END: 08/05/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
No Document Title Filing Date
No Document Title Filing Date