On May 8, 2002, the Court entered the Stipulation and Order of Voluntary Dismissal signed by U.S. District Judge M. J. Lorenz. The case was terminated.
The original complaint charges USA Talks.com, Inc. and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5) promulgated thereunder. Specifically, the complaint alleges on or about November 24, 1998, USAT announced an infusion of over $1.5 million in financing and over $6 million in commitments for system expansion and equipment purchases. The Company stated that this would allow USAT to “move ahead on an accelerated program to provide national coverage and to expand into limited international markets.” The company continued its materially false and misleading statements throughout December 1998 and January 1999, stating that it obtained financing and was “on track” for network installation, that it would complete its nationwide flat-rate long distance service, and, ultimately, on January 27, 1999, that it had successfully installed its flat-rate “all you can talk” long distance Internet telephone service throughout California. The price of USAT common stock rocked from $5.75 on November 24, 1998 to as high as $56 on January 28, 1999. The complaint further alleges that, ultimately, USAT could no longer conceal its false and misleading statements. On or around January 29, 1999, the SEC announced that it was suspending trading in USAT through February 11, 1999, citing questions about the accuracy of information release to the public by the Company.