Wolf Haldenstein Adler Freeman & Herz LLP Commences Class Action Lawsuit on Behalf of Investors in H&R Block, Inc.

Mar 17, 2006, 00:00 ET from Wolf Haldenstein Adler Freeman & Herz LLP

    NEW YORK, March 17 /PRNewswire/ -- Wolf Haldenstein Adler Freeman & Herz
 LLP today filed a class action lawsuit in the United States District Court
 Western District of Missouri, Western Division, on behalf of all persons who
 purchased the common stock of H&R Block, Inc. ("HRB" or the "Company")
 (NYSE:   HRB) between January 31, 2005 through March 14, 2006, inclusive, (the
 "Class Period") against defendants HRB and Mark A. Ernst, the Company's
 Chairman, President, and CEO.
     The case name is Michael Nettie v. H&R Block, Inc., et al.  A copy of the
 complaint filed in this action is available from the Court, or can be viewed
 on the Wolf Haldenstein Adler Freeman & Herz LLP website at
     The complaint alleges that defendants violated the federal securities laws
 by issuing materially false and misleading statements throughout the Class
 Period that had the effect of artificially inflating the market price of the
 Company's securities.
     In particular, in February 2005, California Attorney General Bill Lockyer
 sued the Company over its highly publicized referral anticipation loans
 ("RALs") seeking "hundreds of millions of dollars" on behalf of customers and
 $20 million in civil penalties. Mr. Lockyer's action joins a long list of
 lawsuits that have targeted HRB's RALs -- cash advances that the Company
 arranges for customers so they won't have to wait an extra one to four weeks
 for a check from the federal government they are otherwise entitled to
 receive.  In return for the loans, customers must agree to give a percentage
 of their tax refunds to HRB and its banking partners.
     Further, the Company reported inflated earnings during the Class Period.
 As reported on or about February 23, 2006, the Company must restate results
 for fiscal 2004 and 2005, plus previous 2006 quarters, because of errors in
 calculations regarding its state effective income tax rate.  Reportedly, the
 errors resulted in the Company understating state income tax liabilities by at
 least $32 million as of the end of April 2005.  Indeed, on March 13, 2006, the
 Company announced it would delay filing its quarterly report on SEC Form 10-Q
 until it has completely sorted out its problems.
     Finally, on March 15, 2006, New York Attorney General Elliot Spitzer sued
 HRB alleging that the Company over the last four years opened more than
 500,000 "Express IRA" accounts, an individual retirement account ("IRA") that
 can take the form of either a Traditional IRA or a Roth IRA, for clients of
 its tax-preparation service; but 85% of the customers who opened the accounts
 paid the Company fees in excess of what they earned in interest.  According to
 Mr. Spitzer's complaint, the program exploited lower income, working families
 who were led to believe the plan presented an excellent opportunity to save
 for retirement.
     Mr. Spitzer's complaint further avers that Mr. Ernst was aware of the
 improper fee practices along with other high-ranking members of management.
     Revelations concerning the Company's improper practices concerning the
 Express IRA scheme hammered the Company's stock.  By late afternoon trading on
 March 15, 2006, the Company's price per share was down 5.5% at $20.28;
 earlier, shares traded as low as $19.80 per share, passing the previous
 52-week low of $21.58 set on March 16, 2006.
     HRB's use of these improper practices served to artificially inflate the
 Company's reported earnings during the Class Period because the Company's
 earnings were generated through an improper and unsustainable business
 practice.  Accordingly, the Company's Class Period statements concerning its
 compliance with applicable laws and regulations were false.
     Also, the Company, having disclosed the existence of -- and touted the
 success of -- the Express IRA plan and the RALs program, was obligated to
 disclose the risks associated with the business, including that members of
 management, e.g., Mr. Ernst, were aware that these plans (or at least how they
 were implemented) ran afoul of certain regulations.  Failure to disclose this
 information constituted material omissions, the ultimate disclosure of which
 harmed the Company's stockholders.
     If you purchased H&R Block common stock during the Class Period, you may
 request that the Court appoint you as lead plaintiff by May 16, 2006.  A lead
 plaintiff is a representative party that acts on behalf of other class members
 in directing the litigation. In order to be appointed lead plaintiff, the
 Court must determine that the class member's claim is typical of the claims of
 other class members, and that the class member will adequately represent the
 class.  Under certain circumstances, one or more class members may together
 serve as "lead plaintiff." Your ability to share in any recovery is not,
 however, affected by the decision whether or not to serve as a lead plaintiff.
 You may retain Wolf Haldenstein, or other counsel of your choice, to serve as
 your counsel in this action.
     Wolf Haldenstein has extensive experience in the prosecution of securities
 class actions and derivative litigation in state and federal trial and
 appellate courts across the country.  The firm has approximately 60 attorneys
 in various practice areas; and offices in Chicago, New York City, San Diego,
 and West Palm Beach.  The reputation and expertise of this firm in shareholder
 and other class litigation has been repeatedly recognized by the courts, which
 have appointed it to major positions in complex securities multi-district and
 consolidated litigation.
     If you wish to discuss this action or have any questions, please contact
 Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New
 York 10016, by telephone at (800) 575-0735 (Gregory M. Nespole, Esq., Gustavo
 Bruckner, Esq., Paulette S. Fox, Esq., or Derek Behnke), via e-mail at
 classmember@whafh.com or visit our website at http://www.whafh.com. All e-mail
 correspondence should make reference to HRB.

SOURCE Wolf Haldenstein Adler Freeman & Herz LLP