The complaint alleges that Equisure and certain of its subsidiaries, affiliates, officers, directors and accountants violated the Securities and Exchange Act of 1934 through a fraudulent scheme and course of conduct. The complaint additionally alleges that the defendents issued false and misleading statements concerning Equisure's business and financial results in order to artificially inflate Equisure's common stock price thereby enabling certain Equisure insiders to sell their common stock and realize substantial personal profits. Specifically, the complaint alleges that on Aug. 4, 1997, the American Stock Exchange halted trading of Equisure common stock pending an investigation of the company's accounting practices. Additionally, the complaint alleges that during the investigation, Equisure did not provide the American Stock Exchange with financial records and that Equisure was finally delisted from the American Stock Exchange.
According to the Order entered on December 4, 1997, the Court granted the movant's motion for consolidation of the claims against Equisure, Inc. and titled the action "In re Equisure, Inc., Securities Litigation, Master File No. 97-2056 RHK/JMM." The movant’s motions for appointment of Lead Plaintiffs and Lead Counsels was granted. Thirty days were allowed to the Lead Plaintiffs to serve and file a consolidated amended complaint. However, the docket posted on the site reveals that the Lead Plaintiffs failed to file the consolidated amended complaint within the allotted time period as required by the Order.
On March 26, 1998, the plaintiffs filed a motion for default judgment against Equisure. The motion was taken under advisement, and on April 20, 1998, the Magistrate Judge issued a Report and Recommendation. The Recommendation concluded that defendant Equisure was duly served with the summons and complaint but has failed to respond at any time, and that it is in default. The class was certified for purposes of a default judgment against defendant only: a class of all purchasers of common stock of Equisure for the period 12/5/96 thru 8/1/97. The Recommendation further concluded that the court enter judgment against defendant in favor of the plaintiff class as defined above, in the amt of $45,309,176.51.
As a result, on May 12, 1998, the Court entered the Order by U.S. Judge District Richard H. Kyle stating that since Equisure was served with the summons but the complaint was never filed, the case was in default. The class of plaintiffs was certified and entitled, by the Order, to recover damages from the defendant in the sum of $45,309,176.51.