According to the Company’s FORM 10-K For The Fiscal Year Ended December 31, 2001, on March 5, 2002 upon the Company's motion, Judge Katherine Hayden of the United States District Court, District of New Jersey, ordered the dismissal with prejudice of this consolidated class action.
The original class action complaint alleges that the Defendants violated Section 10(b) of the Exchange Act and Rule10b-5 promulgated thereunder by the of the Securities and Exchange Commission by, inter alia, making material misrepresentations concerning the Company’s financial conditions. As alleged in the class action complaint, on October 4, 2000, Knight revealed its financial problems to the public. The Company could not maintain a 20% to 30% earnings growth rate for the third quarter 2000. Knight issued a press release on October 4, 2000 stating that it would post third quarter profits as much as 58% below Wall Street forecasts because of a weak stock market and the cost of building up its European operations. Also, during the class period, the individual defendants sold in excess of $50 million of Nite stock.