According to the Memorandum Opinion and Order dated April 27, 1999, U.S. District Judge John Corbett O'Meara granted the defendants’ motion to dismiss the case. The case was closed.
On December 8, 1998, the case was inter-district transferred to the U.S. District Court for the Eastern District of Michigan, Southern Division.
The original complaint alleges that Nematron, certain of its officers and directors, its underwriter for a 6/5/96 secondary offering, and its independent auditors violated federal securities laws. The complaint further alleges that the defendants issued false and misleading financial statements and press releases regarding Nematron's revenues, net income and earnings; due to these statements, the market price of Nematron common stock was artificially inflated. The complaint also alleges that this allowed defendant to effectuate the 6/5/96 secondary offering and to acquire 2 other companies with newly issued Nematron stock. Further, the complaint alleges that this allowed corporate insiders to sell over 945,000 shares of stock, reaping proceeds in excess of $5 million.