DYIIE Dynacq International (MM)

Cauley Geller Announces Class Action Lawsuit Against Dynacq Healthcare, Inc. On Behalf of Investors NEW YORK, Jan. 5 /PRNewswire/ -- The Law Firm of Cauley Geller Bowman & Rudman, LLP announced today that a class action lawsuit has been filed in the United States District Court for the Southern District of Texas, Houston Division on behalf of purchasers of Dynacq Healthcare, Inc. (formerly DYII) ("Dynacq" or the "Company") publicly traded securities during the period between January 14, 2003 and December 18, 2003, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.cauleygeller.com/show_case.asp?ccode=214&pcode=10&pp=4 . The complaint charges that defendants Dynacq, Philip S. Chan, and Chiu M. Chan violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 14, 2003 and December 18, 2003. More specifically, the complaint alleges that the defendants' statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts: (1) that the Company had materially overstated its earnings, revenues, net income, and earnings per share; (2) that the Company was improperly accounting for its costs and revenue in violation of Generally Accepted Accounting Principals ("GAAP"); (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On December 1, 2003, the Company announced that it was requesting an automatic extension of up to 15 days for filing its 2003 Form 10-K. The Company stated that recently the Division of Corporation Finance of the United States Securities and Exchange Commission ("SEC") commented upon Dynacq's periodic filings. On December 16, 2003, the Company announced that it would further postpone the filing of its 2003 Form 10-K until the SEC completed its review of Dynacq's periodic filings and its independent auditors have completed their audit of the Company's Aug. 31, 2003 financial statements. On December 18, 2003, the Company announced that Ernst & Young, LLP ("E&Y") resigned late on December 17, 2003 as the Company's independent auditor effective immediately. E&Y verbally advised the Company that E&Y resigned due to the Company's lack of internal controls necessary to develop reliable financial statements. News of this shocked the market with shares of Dynacq falling 18.56 percent or $2.04 per share to close at $8.95 per share on December 18, 2003. The Company further shocked the market when it announced, after the markets had closed on December 18, 2003, that it had received a NASDAQ Staff Determination stating that because Dynacq failed to comply with the requirement of NASD Marketplace Rule 4310 (c) (14), that it file a copy of its Form 10-K Annual Report to the Securities and Exchange Commission ("SEC") in a timely fashion, that its common stock would be delisted from the NASDAQ on December 30, 2003, unless Dynacq requested a hearing. Additionally, the Company disclosed that it had received a notice from the Ft. Worth, Texas office of the SEC that it was conducting an informal investigation pertaining to Dynacq's reporting of its financial statements, its recognition of costs and revenue, its allowances for doubtful accounts, and its internal controls. News of this shocked the market. Shares of Dynacq plummeted 54% or $4.86 per share to close at $4.09 per share on December 19, 2003. If you bought Dynacq publicly traded securities between January 14, 2003 and December 18, 2003, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than February 24, 2004. If you are a member of this class, you can join this class action online at http://www.cauleygeller.com/template8.asp?pcode=6&pp=1 . Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member. Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock and New York. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at http://www.cauleygeller.com/ . Contact: CAULEY GELLER BOWMAN & RUDMAN, LLP Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq. Client Relations Department: Jackie Addison, Heather Gann or Chandra West P.O. Box 25438 Little Rock, AR 72221-5438 Toll Free: 1-888-551-9944 Fax: 1-501-312-8505 E-mail: DATASOURCE: Cauley Geller Bowman & Rudman, LLP CONTACT: Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq., both of Cauley Geller Bowman & Rudman, LLP, +1-631-367-7100 Web site: http://www.cauleygeller.com/ http://www.cauleygeller.com/template8.asp?pcode=6&pp=1 http://www.cauleygeller.com/show_case.asp?ccode=214&pcode=10&pp=4

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