Pegasus Wireless Corporation - Securities Class Action

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Copyright (c) 2001
Stanford Law School

Pegasus Wireless Corporation Summary: The original complaint charges Pegasus and certain of its officers and directors with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. Beginning with an August 24, 2006 report published by The MotleyFool.com, investors were shocked and alarmed to learn a series of disturbing reports on Pegasus and its management, including: (1) Pegasus failed to disclose CEO Jasper Knabb's and CFO Stephen Durland's close business ties with convicted felons, securities fraudsters and the like; (2) Pegasus failed to disclose a series of related party transactions and the manner in which Knabb purchased more than $26 million in Pegasus stock; (3) Pegasus withheld pertinent information involving Knabb's history with penny stock companies with suspicious trading patterns. The revelation of this news caused Pegasus shares to decline almost 25% on volume of almost 2 million shares from the closing price of $7.60 per share two days earlier.

The complaint further alleges that at the close of the Class Period, over Labor Day weekend, a report by Barron's revealed that: (1) Knabb had previously been arrested for possible insurance fraud; (2) Two former Knabb companies -- BIFS Technologies, formerly Biofiltration Systems, and Wireless Frontier -- evidenced suspected stock and market manipulation; (3) Pegasus failed to disclose the truth concerning the novelty and uniqueness of its products and the foreseeability to compete in the current marketplace. Following the Barron's report, on September 5, 2006, the first day of trading after the Labor Day weekend, shares of Pegasus plummeted to a trading low of $1.10 per share, falling over 36.5% on huge volume of almost 18 million shares.

NOTE: On January 28, 2008, the Pegasus Wireless Corporation filed a Chapter 11 voluntary petition for bankruptcy.

On September 26, 2007, the Court issued the Order appointing the Pournaras Group as Lead Plaintiff and approving the selection of the law firm of Kahn Gauthier Swick, LLC, as Lead Counsel. The Court also issued the Order consolidating three related actions under In Re Pegasus Wireless Corporation Securities Litigation, 3:06-CV-06969-MHP. Lastly, the Court issued the Order transferring the action from the U.S. District Court for the Northern District of California to the Southern District of Florida, West Palm Beach Division.

On July 11, 2008, the lead plaintiffs filed Consolidated Amended Class Action Complaint. On September 5, 2008, the defendants filed various motions to dismiss the Consolidated Amended Class Action Complaint. On September 21, 2009, the Court entered several Order and Opinions signed by Judge Kenneth A. Marra granting the defendants’ motions to dismiss without prejudice. The plaintiffs have leave to file a Second Amended Complaint.

On October 23 and November 4, 2009, defendants filed two motions to dismiss. On March 16, 2010, Judge Kenneth A. Marra signed the Final Judgment dismissing the case. All pending motions were denied as moot. The case was closed. On April 1, 2010, Judge Marra signed an Amended Final Judgment.

INDUSTRY CLASSIFICATION:
SIC Code: 3661
Sector: Technology
Industry: Communications Equipment

COMPANY/ISSUER NAME:	Pegasus Wireless Corporation
COMPANY/ISSUER TICKER:	PGWC
COMPANY WEBSITE:	http://www.pegasuswirelesscorp.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Michael Mitchell, et al. v. Pegasus Wireless Corporation, et al.

COURT: N.D. California	DOCKET NUMBER: 06-CV-06969
JUDGE NAME: Hon. Marilyn H. Patel
DATE FILED: 11/07/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 12/22/2005	CLASS PERIOD END: 09/05/2006
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Gutride Safier Reese LLP (San Francisco) 835 Douglass Street, San Francisco, CA, 94114 (voice) 212.579.4625, (fax) 212.253.4272, info@gutridesafier.com Kahn Gauthier Swick, LLC (New Orleans) 650 Poydras St. Suite 2150, New Orleans, LA, 70130 (voice) 504.455.1400, (fax) , lewis.kahn@kglg.com Schatz Nobel Izard P.C. One Corporate Center, 20 Church Street , Hartford, CT, (voice) 860.493.6292, (fax) 860.493.6290, info@snlaw.net Schubert & Reed LLP Two Embarcadero Center, Suite 1050, San Francisco, CA, 94111 (voice) 415.788.4220, (fax) 415.788.0161, mail@schubert-reed.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 4

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Type: Complaint		Date on the document: 11/07/2006
Certification Of Andrew M. Schatz Pursuant To Local Rule 3-7(d)
Type: Other		Date on the document: 01/08/2007
Certification Of Jeffrey S. Nobel Pursuant To Local Rule 3-7(d)
Type: Other		Date on the document: 01/08/2007
Certification Of Michael D. Braun Pursuant To Local Rule 3-7(d)
Type: Other		Date on the document: 01/08/2007
Certification Of Nancy Kulesa Pursuant To Local Rule 3-7(d)
Type: Other		Date on the document: 01/08/2007
Declaration Of Michael D. Braun In Support Of Motion For Appointment Of Lead Plaintiff And Approval Of Lead Plaintiff's Selection Of Counsel
Type: Declaration		Date on the document: 01/08/2007
Memorandum Of Points And Authorities In Support Of Motion For Appointment Of Lead Plaintiff And Approval Of Lead Plaintiff's Selection Of Counsel
Type: Memorandum		Date on the document: 01/08/2007
Notice Of Motion And Motion For Appointment Of Lead Plaintiff And Approval Of Lead Plaintiff's Selection Of Counsel
Type: Motion		Date on the document: 01/08/2007
[Proposed] Order Appointing The Vertical Group As Lead Plaintiff And Approving Selection Of Counsel
Type: Order		Date on the document: 01/08/2007
Declaration Of Michael D. Braun In Further Support Of Motion Of The Vertical Group For Appointment As Lead Plaintiff And Approval Of Choice Of Counsel
Type: Declaration		Date on the document: 02/05/2007
Memorandum Of Law In Further Support Of Motion Of The Vertical Group For Appointment As Lead Plaintiff And Approval Of Choice Of Counsel
Type: Memorandum		Date on the document: 02/05/2007
Reply In Further Support Of Motion Of The Vertical Group For Appointment As Lead Plaintiff And Approval Of Plaintiff's Selection Of Counsel
Type: Other		Date on the document: 02/12/2007
Corrected Reply In Further Support Of Motion Of The Vertical Group For Appointment As Lead Plaintiff And Approval Of Plaintiff's Selection Of Counsel
Type: Other		Date on the document: 02/16/2007
Stipulation And [Proposed] Order Continuing The Initial Case Management Conference And Case Management Deadlines
Type: Order		Date on the document: 03/19/2007
Stipulation And Order Continuing The Initial Case Management Conference And Case Management Deadlines
Type: Order		Date on the document: 03/20/2007
Notice Of Change Of Address
Type: Notice		Date on the document: 03/22/2007
Notice Of Related Case
Type: Notice		Date on the document: 04/26/2007
Plaintiff’s Administrative Motion To Consider Whether Cases Should Be Related
Type: Motion		Date on the document: 04/26/2007
[Proposed] Order Relating Case
Type: Order		Date on the document: 04/26/2007
Notice Of Change Of Firm Name
Type: Notice		Date on the document: 05/01/2007
Related Case Order
Type: Order		Date on the document: 05/02/2007
Clerk's Notice
Type: Notice		Date on the document: 05/03/2007
Joint Case Management Statement
Type: Other		Date on the document: 06/29/2007
Notice of Appearance
Type: Notice		Date on the document: 07/06/2007
Notice Resetting Status Conference
Type: Notice		Date on the document: 07/06/2007
Case Management Statement
Type: Memorandum		Date on the document: 07/16/2007
Clerk's Notice
Type: Notice		Date on the document: 07/20/2007
Withdrawal Of Motion By The Vertical Group For Appointment As Lead Plaintiff And Approval Of Lead Plaintiff's Selection Of Counsel
Type: Other		Date on the document: 08/15/2007
Declaration Of Mark Good In Support Of Motion To Withdraw As Counsel For Defendant Pegasus Wireless Corporation
Type: Declaration		Date on the document: 08/16/2007
Declaration Of Perry J. Woodward In Support Of Motion To Withdraw As Counsel For Defendant Pegasus Wireless Corporation
Type: Declaration		Date on the document: 08/16/2007
Notice Of Motion And Motion To Withdraw As Counsel For Defendant Pegasus Wireless Corporation
Type: Motion		Date on the document: 08/16/2007
Proof of Service
Type: Other		Date on the document: 08/16/2007
Proof of Service
Type: Other		Date on the document: 08/16/2007
[Proposed] Order Granting Terra Law LLP's Motion To Withdraw As Counsel For Defendant Pegasus Wireless Corporation
Type: Order		Date on the document: 08/16/2007
Stipulation And [Proposed] Order Appointing Lead Plaintiff And Approving Selection Of Lead Counsel
Type: Order		Date on the document: 08/16/2007
Notice of Errata
Type: Notice		Date on the document: 08/20/2007
Proof of Service
Type: Other		Date on the document: 08/20/2007
Letter to the Honorable Marilyn H. Patel
Type: Other		Date on the document: 09/04/2007
Letter Re: Michael Mitchell v. Pegasus Wireless Corporation, et al
Type: Other		Date on the document: 09/10/2007
Clerk's Notice
Type: Notice		Date on the document: 09/14/2007
Plaintiff's Administrative Motion To Consider Whether Cases Should Be Related
Type: Motion		Date on the document: 09/14/2007
[Proposed] Order Relating Case
Type: Order		Date on the document: 09/14/2007
Civil Pretrial Minutes
Type: Other		Date on the document: 09/26/2007
Order Consolidating Actions
Type: Order		Date on the document: 09/26/2007
Order Granting Terra Law LLP's Motion To Withdraw As Counsel For Defendant Pegasus Wireless Corporation
Type: Order		Date on the document: 09/26/2007
Order Transferring Consolidated Action To The Southern District Of Florida
Type: Order		Date on the document: 09/26/2007
Proof of Service
Type: Order		Date on the document: 09/26/2007
Stipulation And Order Appointing Lead Plaintiff And Approving Selection Of Lead Counsel
Type: Order		Date on the document: 09/26/2007
Letter To The Clerk
Type: Other		Date on the document: 11/19/2007
U.S. District Court Civil Docket
Type: Docket		Date on the document: 03/03/2008

REFERENCE COMPLAINT

In Re: Pegasus Wireless Corporation Securities Litigation

COURT: S.D. Florida	DOCKET NUMBER: 07-CV-81113
JUDGE NAME: Hon. Kenneth A. Marra
DATE FILED: 07/11/2008	SOURCE: Docket
CLASS PERIOD START: 12/22/2005	CLASS PERIOD END: 09/05/2006
TYPE OF COMPLAINT: Consolidated Complaint
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Kahn Gauthier Swick, LLC (New Orleans) 650 Poydras St. Suite 2150, New Orleans, LA, 70130 (voice) 504.455.1400, (fax) , lewis.kahn@kglg.com Kahn Gauthier Swick, LLC (NY) 12 East 41st Street, 12th Floor, New York, NY, 10016 (voice) 212.920.4310, (fax) 212.696.3730, info@kglg.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint For Violations Of Federal Securities Laws
Type: Complaint		Date on the document: 07/11/2008
Joint Stipulation Of Voluntarily Dismissal Without Prejudice As To Defendant Douglas Hirsch
Type: Other		Date on the document: 07/11/2008
Order
Type: Order		Date on the document: 07/14/2008
Amended Order And Opinion Granting Peraticos’s Motion To Dismiss
Type: Order		Date on the document: 09/21/2009
Order And Opinion Granting Chich-Hsing Tsao’s Motion To Dismiss
Type: Order		Date on the document: 09/21/2009
Order and Opinion Granting Nicholas Peratico's Motion To Dismiss
Type: Order		Date on the document: 09/21/2009
Order And Opinion Granting Pollard-Kelly’s Motion To Dismiss
Type: Order		Date on the document: 09/21/2009
Final Judgment Dismissing Case
Type: Other		Date on the document: 03/16/2010
Amendeed Final Judgment Dismissing Case
Type: Other		Date on the document: 04/01/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 04/01/2010

OTHER DOCUMENTS
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Nick Pournaras, et al. v. Pegasus Wireless Corporation, et al.
Type: Complaint		Date on the document: 09/05/2007
U.S. District Court Civil Docket
Case Name and/or Number: Kathleen Murphy, et al. v. Pegasus Wireless Corporation, et al.
Type: Docket		Date on the document: 09/26/2007
U.S. District Court Civil Docket
Case Name and/or Number: Nick Pournaras, et al. v. Pegasus Wireless Corporation, et al.
Type: Docket		Date on the document: 09/26/2007

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