Securities Sleuth

Two Tough Days for Electronic Clearing House (NASDAQ: ECHO)

Tuesday, March 27, was a very tough day for Electronic Clearing House (NASDAQ: ECHO) after the Company disclosed that it was cooperating with a federal investigation into the services to online gaming web sites.  It Company also agreed to disgorge over $3 million in profits that it had received. The Company also disclosed the it and Intuit had agreed to end their merger agreement in which ECHO shareholders would have received $18.75 per share.

Today has been a slightly better day for the Company.  Prosecutors have reached an agreement not to file charges against Electronic Clearing House because the company is cooperating with the government’s investigaton.

But the two days have been devastating for ECHO investors.  Under the merger with Intuit they would have received $18.75 per share and at the time of this posting ECHO trades at $11.47.

We are investigating this matter and if you are an affected investor you may wish to contact us at info@securitiessleuth.com

Wireless Facilities, Inc. (NASDAQ: WFII) and Backdated Options

Wireless Facilities, Inc. (NASDAQ: WFII) is just the latest of many companies whose investors are upset regarding the Company’s options practices.  It is alleged the Company’s improper and undisclosed practices of backdating options conferred on certain executives who benefited.  It is alleged that the Company’s financial statements in Form 10-K filings for the past five years are materially false and misleading. 

We are investigating this matter and affected investors may wish to contact us at info@securitiessleuth.com to discuss their options. 

Big Trouble for Beazer Homes (NYSE: BZH)

It’s not surprising that the stock of Atlanta-based Beazer Homes (NYSE: BZH) is dropping today.  After hour trading on March 27, 2007 indicated the stock could be under significant pressure in Wednesday’s trading session.

Small wonder.  There have been some troubling developments at Beazer and the news just keeps getting worse.  Federal officials, including the Federal Bureau of Investigation, are investigating Beazer.  An FBI representative stated that "There are potentially all sorts of fraud issues associated with Beazer to include corporate, mortgage or investments in varying degrees.''

Talk about management problems. Two top executives have left Beazer in recent months. Last week, the CFO announced his resignation and left the company two days later.  Last month the Company disclosed that the Company's general counsel had been terminated for cause "for a pattern of personal conduct which includes violations of company policies," but did not to give further details.

We are investigating this matter and affected investors may wish to contact us at info@securitiessleuth.com to discuss their options. 

WSJ Exposes Usana Health Sciences (USNA)

Investigative articles at the Wall Street Journal are often a great service to investors and can often have a dramatic effect on a stock’s price.  A recent example is Salt Lake City-based Usana Health Sciences (USNA) whose major product is a multivitamin.  On March 15, 2007, the Journal published an article that reported a recent analysis of the Company indicates that it may be a ponzi scheme.  Specifically, the article suggested that the Company's sales model is unsustainable because it requires the constant recruitment of new associates.  Eventually the Company will run out of distributors, who will face long odds selling products or recruiting new disciples. Subsequently, the Company disclosed that the SEC is conducting an informal inquiry of the Company.

As noted at the outset, these disclosures have had a significant effect on Usana stock.  On March 15, 2007, the Company’s stock declined from $58.77 per share at the close of trading on March 14, 2007, to close at $49.85 per share, a decline of approximately 15%, on heavier than usual volume.

We are investigating this matter and investors who purchased Usana between November 7, 2006 and March 14, 2007 may be affected and may wish to contact us to discuss their options.. 

Shareholders Take Action Against Monster Worldwide, Inc. (NASDAQ: MNST)

Monster Worldwide (NASDAQ: MNST) is one of the most appalling examples for the backdated options scandal and a case has recently been filed against the Company on behalf of affected shareholders.  As you may recall that on June 12, the same day that the Company announced that it had received a subpoena from U.S. Attorney for the Southern District of New York related to its stock option practices, the Wall Street Journal did a story on Monster.  The article concluded that there only was a one in nine million chance that the grant dates of the options The Journal examined were selected at random.  Not surprisingly, this disclosure resulted in a significant drop in the Company’s stock.

Investors who purchased Monster from May 6, 2005 and June 9, 2006are affected. We are continuing to investigate this matter and affected shareholders may wish to contact us to discuss their options. 

Gulf Island Fabrication, Inc. (NASDAQ: GIFI) Investors Will Restatement Impact

Louisiana-based Gulf Island Fabrication, Inc. (NASDAQ: GIFI), through its subsidiaries, engages in the fabrication and refurbishment of drilling and production platforms, and other specialized structures used in the development and production of offshore oil and gas reserves. On March 1, 2007, after the close of trading, the Company disclosed that that the amount of revenue it had recognized on a contract during the first three quarters of 2006 was overstated and it will restate its financial statements for those periods. Not surprisingly, its stock plummeted on this news. Some argue that such restatements don’t really matter and stocks soon bounce back after such announcements.  What has happened to GIFI is probably more accurate.  Its announcement had an immediate impact on shareholder value and its stock hasn’t recovered. 

It appears that investors who purchased GIFI between April 26, 2006 and March 1, 2007, are affected. We are investigating this matter and affected investors may wish to contact us. 

Openwave Systems, Inc. (NASDAQ: OPWV) and Backdated Options

The decline in the stock price of Openwave Systems, Inc. (NASDAQ: OPWV) during 2006 illustrates the damage done by the backdated options scandal. 

Before an announcement on May 22, 2006that the SEC was investigating the Company’s stock option grants and practices, its stock traded at over $15 per share.  After the Company disclosed in early October 2006 that it would restate its financials for the last five years and then disclosed in late October 2006 that its was also reviewing the tax implications triggered by the mandatory accounting adjustments, its stock traded at under $9 per share.  If the Company had adequate internal and financial controls in place this would not have happened.  Instead, it appears that the Company intentionally concealed the true grant dates of the stock options. 

Investors who purchased between September 30, 2002 and October 26, 2006 are affected.  We are currently investigating this matter and if you are an affected investor, you may wish to contact us to discuss your options.

Active Power (ACPW) Will Restate

Active Power (ACPW) disclosed on March 12, 2007 that it will restate its financials.  Specifically, the Company decided it will restate its financials from 2001 to 2006. This announcement doesn’t come as a total surprise. On February 2, 2007, the Company disclosed that preliminary findings showed that it had backdated certain option grants and that it may restate certain financial statements.  In addition, the Company disclosed that its Chairman had resigned.

It appears that investors who purchased ACPW between April 18, 2002 and February 1, 2007, are affected. We are investigating this matter and affected ACPW investors may wish to contact us to discuss their options.   

More Trouble Shuffle Master (NASDAQ: SHFL) Investors

Last week there were some troubling developments at Shuffle Master, Inc. (NASDAQ: SHFL), a company which engages in the development, manufacture, sale, and marketing of technology and entertainment-based products for the gaming industry.  Specifically, on February 27, SHFL stock has declined precipitously after the company disclosed preliminary results for the quarter ended January 31, 2007.  Now the Company has disclosed more bad news.  On March 12, 2007, after the close of trading, the Company disclosed that its previously issued audited financial statements as of and for the twelvemonth period ended October 31, 2006 and the unaudited selected quarterly financial information for the three months ended October 31, 2006, should be restated.  As you would suspect, its stock dropped significantly on this news in heavy trading.  It appears that investors who purchased stock between March 20, 2006 and March 12, 2007, may be affected. 

We are investigating this matter and affected shareholders may wish to contact us to discuss their options.

Shareholders Move Against HCC Insurance Holdings (NYSE: HCC)

Late last fall we reported some troubling facts regarding HCC Insurance Holdings, Inc. (NYSE: HCC)   Specifically, on November 16, 2006, after the market closed, HCC announced that it had backdated option grant dates from 1997 through 2006 and that it would restate financial reports previously filed with the SEC and disseminated to investors in press releases. In response to this announcement, the price of HCC stock dropped materially falling from a close of $31.64 on November 17, 2006, to a low of $28.81 on November 20, 2006 (the next trading day), representing a one-day share price decline of 9% on volume of 6.6 million shares.

In view of the above-mentioned facts it isn’t surprising that investors are taking action against the Company.  Investors who purchased between May 3, 2005 and November 17, 2006, are affected.

We are investigating this matter and affected shareholders may wish to contact us to discuss their options.