On September 20, 2005, the Court entered the Mandate from the Ninth Circuit Court of Appeals. According to the Mandate, the judgment of the district court was affirmed.
According to the Order and Judgment entered February 24, 2003, U.S. District Judge Stephen V. Wilson adjudged that the plaintiffs take nothing, that the action be dismissed on the merits and that the defendants recover of the plaintiffs their costs of action terminating the case. The court therefore grants defendants’ motion for summary judgment on the grounds that plaintiffs will be unable to carry their burden of proof of trial on the elements of material misrepresentation or omissions, causation and damages. A Notice of Appeal was later filed by the plaintiffs and the case is currently pending in the Ninth Circuit Court of Appeals.
The complaint charges certain officers and directors of Southern Pacific and its controlling shareholder, Imperial Credit Industries, Inc., with violations of the Securities Exchange Act of 1934. It has been expanded from the original lawsuit to cover the period through September 30, 1998, and to cover all Southern Pacific securities. Specifically, the complaint alleges that defendants issued a series of false and misleading statements about Southern Pacific's earnings, profitability and business condition and issued financial statements during the Class Period that were materially false and misleading and violated Generally Accepted Accounting Principles, thereby misleading investors regarding Southern Pacific's true financial condition and then-current financial performance. As a result, the prices of Southern Pacific's securities were artificially inflated during the Class Period, causing its stock price to jump to as high as $18 per share.
A similar, purported class action complaint was also filed in the U.S. District Court for the Eastern District of Wisconsin. That action was later transferred to the Central District of California.