March 6, 2002 -- A securities class action is pending against several top officers of Global Crossing Ltd. (NYSE: GX) (OTC Bulletin Board: GBLXQ) who allegedly released false and misleading financial statements to investors.

The class action was filed February 11, 2002 in the U.S. District Court for the Southern District of New York and seeks damages for violations of federal securities laws on behalf of all investors who bought Global Crossing stock from January 2, 2001 through October 4, 2001 (the "Class Period").

The complaint charges five top Global Crossing managers with artificially inflating earnings by improperly recording and reporting cash and revenue from certain long-term lease contracts for the rights to use the company's fiber optic cable network. Simultaneously, the complaint says, Global Crossing entered into substantially similar agreements with the same companies to purchase bandwidth capacity from them in a different area. In essence, the complaint alleges that these swap transactions were improperly recorded to artificially inflate the company's financial results.

At the same time, according to the complaint, the company was carrying an increasingly heavy debt burden that was exacerbated by an ever-shrinking market for bandwidth. This forced the company to drastically lower its prices. The company was unable to offset the declining demand for bandwidth capacity with the sale of customized provider services because, unknown to investors, the defendants had no viable plan for establishing Global Crossing as a provider of these services, the complaint says.

Also during the Class Period, the complaint says, the individual defendants and other Global Crossing insiders generated more that $149 million from insider stock sales.

The full extent of Global Crossing's financial crisis began to emerge on October 4, 2001 when the company announced that its third quarter 2001 cash revenues were $400 million below expectations and that it was selling off its desktop trading systems division. The complaint says that investors were also stunned by the announcement that the company's expected recurring adjusted EBITDA would fall almost $300 million less than analyst expectation. In reaction to these statements, Global Crossing stock plunged 49% to $1.07 per share.

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