As reported by the firm's FORM 10-Q For The Quarterly Period Ended June 30, 1998, on April 20, 1998, the United States District Court granted final approval of the
Settlement. The Settlement was subject to appeal prior to May 20, 1998. As there were no appeals, the state court action was dismissed with prejudice pursuant to the agreement with the parties.
According to the same SEC filing, by a Memorandum of Understanding dated August 8, 1997, which has been commemorated in a Stipulation of Settlement executed on behalf of defendants on January 13, 1998 (the "Settlement"), the Company reached preliminary agreement to settle both actions. Pursuant to the Settlement, Director and Officer Liability Insurers contributed $7.5 million to a settlement fund, the Company has contributed $500,000 to a settlement fund, and the Company assumed responsibility for attorneys fees it incurred in the action. The Settlement provided that a class be certified for purposes of all Purchasers of the Company's American Depository Shares from November 14, 1995 to February 27, 1997. The Company and its former and current officers, directors, and employees were released from claims brought in the actions by the settlement class.
The original complaint charged Insignia and certain of its officers and directors with violations of the federal securities laws. The violations involved massive insider trading by defendants who had access to the true but undisclosed adverse information about Insignia. During the Class Period, and as part of the scheme, the alleged defendants collectively sold 3.6 million ADSs to the public at an artificially inflated price of $12 per share, including some $20 million of ADSs sold by Insignia insiders. Thereafter, the defendants are alleged to have artificially inflated the price of Insignia's ADSs by making false and misleading statements to securities analysts and others and by falsifying Insignia's financial statements before the truth came out and the price of Insignia's ADSs collapsed to $2-1/2 on February 27, 1997.
