According to the docket posted, on March 1, 2002, the plaintiffs filed a notice of appeal from the Order granting the defendants’ motion to dismiss the second amended complaint with prejudice. On June 17, 2002, the Court entered the certified copy of the Appellate Court Order. According to the Order, pursuant to the stipulation of the parties, this appeal is voluntarily dismissed.

Previously, on February 9, 1999, the Court entered the Order granting the motion to appoint three shareholders as lead plaintiffs and further granted the motion for the approval of Milberg, Weiss, Bershad, Hynes & Lerach as lead counsel. On March 15, 1999, Court entered the Order consolidating a related case, 98cv2373, with the lead case, 98cv2012. On April 5, 1999, a First Amended Class Action Complaint was filed, and later that month, the defendants responded by filing a motion to dismiss the first amended complaint. On November 3, 1999, another motion to dismiss was filed, but before any ruling on that motion, a Second Consolidated Amended Class Action Complaint was filed on December 22, 1999. On February 7, 2000, the defendants filed a motion to dismiss with prejudice the second amended complaint. On August 27, 2001, the Court entered the Order dismissing the claims against one of the individual defendants, and on February 4, 2002, the Court entered the Order granting the defendants’ motion to dismiss the second amended complaint with prejudice.

The original complaint charges DataWorks and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, the defendants artificially inflated DataWorks stock to as high as $27 per share by falsifying and manipulating DataWorks' reported net income for the 4thQ 97 and 1stQ 98 and by making a series of false and misleading statements about DataWorks' acquisition of, and merger with, Interactive Group Inc. ("Interactive") and the demand for and sales of its Avante/InfoFlo product line, both in the U.S. and in Europe. During the Class Period, DataWorks was unreservedly positive about its Interactive merger and its Avante product line, including InfoFlo. As a result, DataWorks forecast 25%-35% growth, with 98 and 99 EPS of $1.15-$1.23 and $1.43-$1.53, respectively, as DataWorks' Chief Executive Officer publicly stated: "The company is satisfied with the projected earnings in general and believes we can meet these numbers."

The complaint further alleges that during February 1998 to June 1998, while DataWorks' stock was artificially inflated due to these alleged false statements, DataWorks' top insiders sold 437,616 shares of their DataWorks stock at between $18-1/2-$26-5/8 for $9.8 million in proceeds. In mid-July 1998, DataWorks stock began to fall sharply as information began to circulate that DataWorks was having problems and would report worse than forecasted 2ndQ 1998 results. After the close of trading on July 16, 1998, DataWorks admitted what had been rumored, that its 2ndQ 1998 results would be well below expectations and that this serious shortfall was due to problems with its Avante product line. DataWorks stock fell immediately to $8-5/8 on huge volume of 2.4 million shares, a 36% one-day decline on the largest one-day volume in DataWorks' stock in its history as a public company.