Pomerantz Haudek Files Class Action Against K-tel for Securities Fraud
Thursday December 3, 4:22 pm Eastern Time
Company Press Release
SOURCE: Pomerantz Haudek Block Grossman & Gross LLP
Pomerantz Haudek Files Class Action
Against K-tel for Securities Fraud
NEW YORK, Dec. 3 /PRNewswire/ -- Pomerantz Haudek Block Grossman & Gross LLP released the
following:
Pomerantz Haudek Block Grossman & Gross LLP (http://www.pomlaw.com) filed a class action against
K-tel International Inc. (Nasdaq: KTEL - news) over its deceptive practices concerning Nasdaq's possible
delisting of K-tel from the Nasdaq National Market.
This class suit has been filed in the Minnesota US District Court. In addition to K-tel, its two top
officials stand accused of issuance of false and misleading statements during the period November 3,
1998 to 11:30 am on November 17, 1998 (''Class Period''), when the delisting possibility was finally
disclosed. All purchasers of K-tel common stock during this period (the ''Class'') are included in the suit
and can contact Marc Gross at the Pomerantz firm 888-476-6529 (toll free) or by E-mail at
migross@pomlaw.com with any inquiries.
K-tel common stock was listed on the prestigious and highly liquid Nasdaq National Market. As
defendants have now admitted, at least three weeks before November 17, 1998, K-tel received a
warning letter from Nasdaq that its common stock faced delisting from the National Market because it
failed to meet NASDAQ's $4 million minimum asset requirement for continued listing. Despite the
warning letter, K-tel, for the next three weeks, concealed this information and painted a misleadingly
positive picture about K-tel, alleges the complaint. For example, on November 3, 1998 and on
November 10, 1998, defendants publicly touted two partnerships with household corporate names
such as Playboy and Microsoft relating to the Company's new venture as an Internet music retailer but
did not say a word about the possibility of delisting. These unqualified positive announcements
resulted in skyrocketing prices for K-tel's stock.
After the Company belatedly revealed on November 17, 1998 the possibility of delisting, the
Company's stock price dropped 32% on that day, closing at $12.00, and on the next day fell an
additional 17%. During the Class Period, the stock price had reached over $39 as a result of defendants'
materially misleading representations and omissions.
The plaintiff, a K-tel stockholder that was injured by the fraud, seeks damages for himself and the
Class for defendants' violations of the Securities Exchange Act of 1934.
Plaintiff is represented by Pomerantz Haudek Block Grossman & Gross LLP, which is one of the nation's
preeminent specialists in corporate, securities, ERISA and antitrust class litigation. Founded by the late
Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm has continued in
the tradition he established, fighting for the rights of the victims of securities frauds, breaches of
fiduciary duty and corporate mismanagement. In so doing, the firm has been responsible for numerous
multimillion dollar recoveries on behalf of class members.
If you are a member of the Class described above, you may, if you so choose, file a motion no later than
January 18, 1999 with the District Court requesting to serve as lead plaintiff in the action. To serve as
lead plaintiff, however, you must meet certain legal requirements. If you have any questions concerning
the litigation, please contact Marc I. Gross of Pomerantz Haudek Block Grossman & Gross LLP at
888-476-6529 (toll free) or by E-mail at migross@pomlaw.com.
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