Valassis Communications, Inc. ("Valassis" or the Company) prints, markets and distributes coupons and newspaper advertising inserts.

The Complaint alleges that Valassis and certain of its officers and directors issued materially false statements concerning Valassis' performance and future prospects, causing Valassis' shares to trade at artificially inflated levels. Specifically, Defendants knew, but failed to disclose: (i) that the price increase implemented by the Company in 2001 in its free-standing inserts business and then retracted in February 2002 was negatively impacting the Company's ability to win contracts; (ii) that the Company was experiencing increased competition from News America who was offering customers lower prices and longer contract terms; and (iii) based on the foregoing, Defendants lacked a reasonable basis for their positive statements about the Company and their earnings forecasts which were false when made.

The Complaint further alleges that on October 24, 2002, Valassis released its financial and operational results for the third quarter ended September 30, 2002, and shocked the market when it announced that it would dramatically lower its earnings' guidance for 2003 to $2.22 per share, well below analysts' consensus of $2.70 per share. On this news, Valassis stock fell from a close of $34.96 on October 23, 2002 to a close of $26.01, a decline of more than 25%.

According to the Stipulated Order, dated March 10, 2005, the action against Defendants and certain individual Defendants was voluntarily dismissed without prejudice by the lead Plaintiffs, without costs or any attorney’s fees to any party.