The complaint charges Anchor and certain of its officers and directors and the investment banking firm BT Alex. Brown, which acted as lead underwriter for the October 1997 offering of 1.8 million shares of Anchor's common stock, with violations of securities laws for misrepresenting the status and strength of Anchor's business operations and earnings growth. By concealing the true facts about Anchor's troubled Colorado gaming operations and declining revenues from its Wheel of Gold proprietary gaming devices, defendants artificially inflated Anchor's stock price from $69 on July 31, 1997 to a Class Period high of $99.50 in October 1997, allowing Anchor's top insiders to sell $190 million of their Anchor stock at prices as high as $91 per share. However, as the truth about Anchor's diminished profitability and troubled proprietary gaming and casino operations started to surface, Anchor's stock collapsed to as low as $52-1/8 per share.
A similar class action complaint was also filed in the U.S. District Court for the District of Colorado. That case was subsequently transferred to the U.S. District Court for the District of Nevada.
According to the firm's 10-K filing dated 9/28/1999, several securities class action lawsuits have been filed against the Company and certain of its current and former officers and directors. The lawsuits were filed in various jurisdictions following the Company's announcement in early December 1997 that the Company's results for the December quarter might not meet
analysts' expectations. The lawsuits have been brought on behalf of certain
purchasers of the stock of the Company and allege violations of state and/or
federal securities laws arising out of alleged misstatements and omissions to
state material facts about the Company over various periods of time covered by
the suits and seek unspecified damages. The lawsuits were consolidated in
Nevada, both in federal (U. S. District Court, District of Nevada) and state
court (Eighth Judicial District Court, Clark County, Nevada). The consolidated
federal action, captioned IN RE ANCHOR GAMING SECURITIES LITIGATION, Civil
Action No. CV-S-97-01751-PMP (RJJ), was dismissed on January 6, 1999 with the
court entering a judgement in favor of Anchor Gaming.