According to the docket, on September 16, 2004, the Court entered the Amended Preliminary Approval Order in connection with settlement proceeds. On December 2, 2004, the Court entered the Final Judgment and Order of Dismissal by Judge Phyllis J. Hamilton. The case was terminated.
Earlier, on May 3, 2002, Judge Phyllis J. Hamilton granted the motion to dismiss the second amended class action complaint and the case was dismissed with prejudice. The plaintiffs soon after filed a Notice of Appeal, and on November 18, 2003, the Court entered the certified copy of the Order from the Ninth Circuit Court of Appeals remanding the matter back to the District Court.
The original complaint charges Pacific and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that while defendants were publicly reporting profits of more than $10.1 million for Pacific's first, second and third quarters of 1999, defendants used Pacific common stock to acquire the assets of Robo Tel, Inc. and attempted to use its stock to fund its most important acquisition ever, the acquisition of NOS Communications, Inc., just weeks before revelations of accounting fraud had surfaced. The complaint further alleges that as Pacific continued to report profits and defendants created the fiction that Pacific had earnings per share of $0.22, $0.13 and $0.18, respectively, in the first, second and third quarters of 1999, which defendants later admitted were false, the price of Pacific stock reacted, rising to a Class Period high of $44-5/8. Defendants sought to profit from Pacific's fictional record profits and purported growth and sold over 31,000 shares during the Class Period for proceeds of $1.1 million. After the market had closed, on March 31, 2000, Pacific shocked investors, revealing that it would restate its first, second and third quarter earnings for 1999. This revelation caused Pacific stock to plummet to $10-1/4 per share, a decline of 75% from its Class Period high the following trading day. Pacific's shares continued their descent to $7-1/2 in the days that followed.
NOTE: PGEX filed for bankruptcy in the Northern District of California under Chapter 11 on December 29, 2000 and is not included as a defendant.
