The Digest: A Roundup of San Fernando Valley News Homestore.com Overstated Revenue Homestore.com Inc. has said it overstated revenue in the first three quarters of 2001 by as much as $95 million and could restate additional financial results for 2000. An internal investigation has determined that between $54 million and $95 million of barter transactions in the first three quarters of 2001 were booked incorrectly as advertising transactions. The restatement could amount to as much as 27 percent of Homestore’s revenue during the first three quarters of 2001. For the nine months ended Sept. 30, the company initially reported sales of $350.9 million and a net loss of $245.8 million. Stockholders have also filed a class action suit against Homestore.com because of the situation. Lawyers representing shareholders of Homestore.com Inc. claim in their suit that the Internet’s largest residential real estate site and its top executives violated federal securities laws by misrepresenting financial data and concealing “improper acts.” The suit against Homestore.com, filed in U.S. District Court in Central California, charged the Westlake Village-based company with misstating the firm’s prospects and overstating revenue and assets in order to boost the value of Homestore.com stock. The defendants, including Homestore.com Chairman and Chief Executive Stuart H. Wolff, were able to sell at least $27.9 million worth of their own shares as a result, according to the suit. Late last month the company announced it would restate certain financial statements as part of an investigation of its accounting practices by the board of directors’ audit committee. Shortly after that, officials at Nasdaq suspended trading in Homestore.com shares after the exchange requested information from the firm. Earlier this month, Homestore.com said Chief Financial Officer Joseph Shew resigned for personal reasons. The lawsuit filed against Homestore.com applies to all who purchased shares between July 20, 2000 and Dec. 21, 2001. Nasdaq has halted trading in shares of the online real estate company indefinitely. The company said it is still too early to know what size any restatements for 2000 might be. Calabasas Continues Fight Against Ahmanson The Calabasas City Council has approved the expenditure of $400,000 to fight the Ahmanson Ranch project. The council voted 4-1 Jan. 2 to approve the additional funding after already spending $171,000 in its campaign. Calabasas City Councilman Michael Harrison, who has opposed the project in the past, cast the dissenting vote. His peers, however, said the money was well-spent, especially now that Ventura County is expected to release a supplemental environment impact report later this month on Ahmanson Ranch. The council also voted to review the expenditures quarterly and to hire a part-time coordinator to monitor the opposition. Amgen Cuts Deal With Acadia Amgen Inc., based in Thousand Oaks, will collaborate with Acadia Pharmaceuticals of San Diego to discover new small molecule drugs. The deal gives Amgen access to Acadia’s proprietary chemical-genomics platform. The partnership allows Amgen to develop and commercialize drugs using Acadia’s technology. Acadia will receive research funding and other remuneration if a successful drug is developed. Amgen has also expanded on a three-year drug discovery deal established last month with Carlsbad-based Isis Pharmaceuticals Inc. Isis is working on a new genetic technology called antisense, which will stop disease at an earlier stage than traditional drugs. An antisense inhibitor is a synthetic DNA-like drug molecule. Molecules bind to genes to stop them from producing damaging proteins. SEC Files Suit Against Masry-led Company The Securities and Exchange Commission filed a lawsuit in U.S. District Court in New York alleging fraud and deception against Save the World Air Inc., its founder and former president Jeffrey Alan Muller and a consultant. Thousand Oaks Mayor and lawyer Ed Masry recently became Save the World Air’s chief executive officer. Masry is not named in the lawsuit. The civil action alleges that from February 1999 through April of this year, the defendants issued misleading and false promotional information that artificially raised the value of the company’s stock. In addition, the federal commission is seeking to bar Muller from serving as an officer or director of a public company. No Wal-Mart: The Burbank City Council has told a developer it is not interested in a Wal-Mart and Sam’s Club on 12 acres formerly occupied by the Zero Corp. Century City-based Rothbart Development wanted to buy the 12-acre site on Front Street between the Golden State Freeway and the railroad tracks.
