Zale Corp Hit with Class Action Lawsuit

JCK Staff -- JCK Online, 11/20/2009 10:22:19 AM

Shalov Stone Bonner & Rocco LLP announced Thursday that a class action lawsuit has been filed on behalf of purchasers of the securities of the Zale Corporation during the period between November 16, 2006 and October 29, 2009. The lawsuit is pending in the United States District Court for the Northern District of Texas.

According to the complaint, during this period the defendants made false and/or misleading statements, and failed to disclose the following: that instead of recording certain advertising costs as an expense, Zale improperly recorded them as prepaid advertising; that Zale improperly accounted for intercompany accounts receivable associated with its wholly owned insurance subsidiaries; that as a result, Zale's financial results were overstated during this period and were not prepared in accordance with generally accepted accounting principles; that Zale lacked adequate internal and financial controls; and as a result Zale's financial statements were materially false and misleading at all relevant times.

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