According to the docket posted, on November 1, 1999, the Court entered the Order and Final Judgment signed by U.S. District Judge Jorge A. Solis adopting the magistrate judge’s recommendations dismissing the amended class action complaint with prejudice.

Previously, on January 27, 1999, the Court entered the Order granting the motion for appointment of lead plaintiffs and approval of co-lead counsel. On February 26, 1999, the defendants filed a motion to dismiss the class action complaint, but on March 31, 1999, the plaintiff filed an Amended Complaint. On May 4, 1999, the defendants again filed a motion to dismiss the amended class action complaint. On July 30, 1999, Magistrate Judge Jeff Kaplan issued the Findings, Conclusions and Recommendations that the motion to dismiss the amended class action complaint should be granted in its entirety and this case should be dismissed with prejudice.

The original Complaint charges that Gadzooks and certain officers and directors of the company during the relevant time period violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by, among other things, misrepresenting and failing to disclose material information concerning the company's "to date" July sales figures, information that would have undermined its July 9, 1998 press release and statements contained therein regarding its profitability and inventory composition and positioning.

The Complaint alleges that by July 9, 1998, defendants had actual knowledge of the negative, underlying material facts indicating that sales for the first nine days of July were below expectations, that the company's inventory and products were not being adequately accepted in the marketplace, that the sales trend was highly negative, that the overall and budgeted sales for July, one of the "most important profit months of the second quarter" were at risk and would be well below expectations, and that, as a result, profitability would suffer substantially. The scheme (i) deceived the investing public regarding Gadzooks' business, its finances and the intrinsic value of Gadzooks' common stock; and (ii) caused plaintiff and other members of the Class to purchase the company's common stock at artificially inflated prices.