Shareholder Class Action Filed Against Escala Group, Inc. by the Law Firm of Schiffrin & Barroway, LLP

24 May 2006

The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all securities purchasers of Escala Group, Inc. (Nasdaq: ESCL) ("Escala" or the "Company") between September 5, 2003 and May 10, 2006, inclusive (the "Class Period").

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.

The Complaint charges Escala, its majority shareholder, its auditor, and certain of its officers and directors with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company's business model was based on a fraud; (2) specifically, that Afinsa Bienes Tangibles, S.A. ("Afinsa"), Escala's majority shareholder, was overvaluing its stamp inventory in order to attract investors and paying its investors with money from newly arrived investors rather than generated revenue; (3) that Afinsa's revenue was generated through fraudulent activities; (4) that the Company lacked adequate internal controls; and (5) that, as a result of the above, the Company's financial statements were materially false and misleading.

On May 9, 2006, while the market was open, Escala announced that Spanish judicial authorities, as part of what appeared to be an investigation into the Company's stamps-collectibles sector, collected documents from Afinsa, Escala's majority shareholder. In what the Company believed was an extension of this process, Spanish authorities also collected documents at Escala offices in Madrid, during which time normal operations at these locations were suspended. The Company also reported that it had been advised that certain members of the board of directors of Afinsa, including Carlos de Figueiredo, an Afinsa representative on Escala's board, were being questioned. Also on May 9, 2006, before the market closed, Spanish police announced that they had arrested nine people in an anti-fraud swoop. Spanish police stated that the people under investigation were suspected of pocketing a "substantial" amount of the money that investors put into guaranteed-return funds run by Forum Filatelico and Afinsa. On this news, shares of Escala plummeted $19.77, or 61.78 percent, to close, on May 9, 2006, at $12.23 per share, on heavy trading volume. Shares of Escala sank an additional $5.68, or 46.44 percent, the next day, to close, on May 10, 2006, at $6.55 per share, on heavy trading volume.

On May 11, 2006, Spanish authorities charged 11 people for their involvement in the pyramid scheme, including 5 Afinsa executives. On this news, shares of Escala dropped $2.21, or 33.74 percent, to close, on May 11, 2006, at $4.34 per share, on heavy trading volume.

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com.

If you are a member of the class described above, you may, not later than July 10, 2006, move the Court to serve as lead plaintiff of the class, if you so choose. 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 Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.

CONTACT: Schiffrin & Barroway, LLP

Darren J. Check, Esq.

Richard A. Maniskas, Esq.

280 King of Prussia Road

Radnor, PA 19087

1-888-299-7706 (toll-free) or 1-610-667-7706

Or by e-mail at info@sbclasslaw.com

Source: prnewswire

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