According to the Order and Final Judgment, entered on September 10, 2002, from the U.S. District Judge Honorable Sue L. Robinson of the U.S. District Court of Delaware, the case was settled. Further, on March 21, 2003, per court order, the case was reopened to resolve matters on the distribution of the settlement. The case was finally closed on August 09, 2004.
According to a Press Release dated October 26, 1999, the complaint charges that Starnet and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint further alleges that the defendants issued materially false and misleading statements about the nature of the Company's business and failed to disclose potential liabilities throughout the Class Period in the Company's public filings and public statements. Specifically, the complaint alleges that Starnet routinely violates Canadian gambling laws, and that the Company accepts wagers from North Americans, contrary to public representations made throughout the Class Period. As a result of these misrepresentations and omissions, the price of Starnet's common stock was artificially inflated throughout the Class Period, enabling Defendants to sell thousands of shares and reap millions of dollars in illicit insider trading profits. On August 20, 1999, after a massive police raid, the truth was finally revealed and the stock price plummeted by approximately 60% of its market price.