According to the closing Order, entered on April 1, 1998, from U.S. District Judge John S. Martin of the United States District Court for the Southern District of New York, the case was voluntarily dismissed without prejudice pursuant to Rule 41(a)(1) of the FRCP.
The original complaint alleges that Minorca Resources, Scotia McLeod Inc., and Scotia Capital Markets Inc. violated section 12(2) of the Securities Act of 1933 by making material misrepresentations in connection with the Special Warrants Offering of Minorca completed on March 13, 1997. The complaint alleges that defendants made material misrepresentations and/or omitted material facts, concerning Minorca, which is engaged in the acquisition and exploration of gold properties. Specifically, the complaint alleges that Minorca blindly relied upon gold resource calculations which were derived from sample testing methods which were not industry-accepted, and that as a result, the gold resource calculations cited by Minorca relating to the Busang Deposit were dramatically overstated. The complaint further alleges that when the company disclosed that the gold resource calculations at the Busang Deposit had been materially overstated, the price of Minorca common stock dropped almost 70 percent.