This press release may be a bit premature, but who can blame them. I am sure that the investigation is still moving forward. So far, the company is facing ten class action suits.
Escala Group Reports that Written Statement by Spanish Prosecutorial Office Contains No Allegation of Impropriety by the Company
Monday May 15, 10:41 am ET
Board Appoints Audit Committee to Conduct Investigation
NEW YORK, May 15 /PRNewswire-FirstCall/ -- Escala Group (Nasdaq: ESCL - News) today announces that it has obtained and reviewed the written statement of allegations (querella) that was submitted to a Spanish court by the Spanish prosecutorial office (Ministerio Fiscal) in connection with the investigation of Afinsa Bienes Tangibles, S.A. (Afinsa) in Spain. Escala has confirmed that this document does not allege any impropriety on the part of Escala or any of its subsidiaries. No charges have been filed against Escala or any of its subsidiaries.
Jose Miguel Herrero, Chief Executive Officer of Escala, commented: "We intend to move the Company forward and to continue to pursue our strategies in philately, numismatics, and art & antiques. Although the Company faces challenges as a result of the events of last week, there continues to be strong demand in the collectibles markets in which we operate, and we believe that Escala's core operations in auctions, trading and sales of inventory in our collectibles segments are well-positioned to benefit from that demand."
The Company also announces other steps that it is taking to respond to the investigation of Afinsa. The Company reports that its Board of Directors has directed its Audit Committee, comprised of three independent directors, to conduct an investigation into whether the Company acted in any way improperly in its business transactions with Afinsa.
Mr. Herrero continued, "Our Board resolved to instruct the Audit Committee to investigate this matter. While our focus needs to be on our future, we must also ensure that we take all appropriate steps to respond to the developments in Spain. This decision of the Board is an important part of that effort."
Escala also notes that Antonio Martins da Cruz, an Afinsa representative on Escala's Board of Directors, has tendered his resignation from the Board. In addition, Escala is seeking the resignation from the Board of Carlos de Figueiredo, the other Afinsa representative, who has been detained by Spanish authorities in connection with the events involving Afinsa.
The Company further reports that it has become aware of at least ten putative class action lawsuits that were filed in the past week against the Company and certain of its officers and directors relating to the Company's transactions with Afinsa. These complaints allege, among other things, violations of federal securities laws. The Company has not yet been served with the complaints in these lawsuits, but based on reports concerning the claims in the lawsuits, the Company believes that the claims lack merit and the Company intends to defend against them vigorously.
About Escala Group, Inc.
Escala Group is a global network of leading companies in the collectibles market with operations in North America, Europe and Asia as well as on the Internet. The company operates through a number of subsidiaries that specialize in various sectors of the collectibles markets, and is comprised of three business areas: auctions, merchant/dealer operations and trading.
Escala Group's North American auction and retail operations include Greg Manning Auctions division, Ivy & Manning Philatelic Auctions, Greg Manning Galleries, Greg Martin Auctions, Teletrade, Nutmeg Stamp Sales, Superior Sports, Bowers and Merena Auctions, North American Certified Trading, and H.R. Harmer. In Europe, the leading auction houses affiliated with the network are Auctentia Subastas (Afinsa Auctions) of Madrid, Spain; Corinphila Auktionen of Zurich, Switzerland; and the Koehler group of auction companies of Berlin and Wiesbaden, Germany. In Asia, Escala Group's auction operations are conducted through John Bull Stamp Auctions, Ltd, the oldest philatelic auction house in Hong Kong.
Merchant/dealer activities are conducted through Greg Manning Auctions and Central de Compras Coleccionables, S.L. of Madrid, and through Spectrum Numismatics International, one of the largest wholesalers of rare coins in the U.S.
The trading activities of Escala Group are conducted through A-Mark Precious Metals, one of the largest private sellers of bullion coins and bullion gold, silver and platinum to the wholesale marketplace.
SAFE HARBOR
Statements contained in this presentation that relate to future plans, objectives, expectations, performance, events and the like are "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that may cause such differences include changes in market conditions, changes in economic environment, competitive factors and the other factors discussed in the "forward-looking information" or "risk factors" sections included in ESCL's filings with the Securities and Exchange Commission, including ESCL's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, prospectuses and other documents that ESCL has filed with the Commission. In particular, any statement related to ESCL's expected revenues or earnings or ESCL's being well positioned for future profitability and growth are forward-looking statements.
The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. ESCL undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
(ESCL)
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Source: Escala Group
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