On October 4, 2006, the Court entered the Final Judgment signed by U.S. District Judge Anthony J. Battaglia. According to the Final Judgment, this Court hereby dismisses this Action on the merits and with prejudice against all persons or entities who are Class Members, in favor of Defendants and without costs to any of the parties as against any other settling party, except as provided in the Stipulation. Plaintiff's counsel are awarded fees of $600,000.00 (33 1/3%) plus interest of the same rate earned in the settlement fund until the date of payment, and dispursements of $60,461.39. The two lead plaintiffs (Robert Famberg and Richard Tavano) shall receive a payment of $5,000.00 each, for their services to the Class.
According to a press release dated August 10, 2006, a hearing has been scheduled before this Court on September 29, 2006 at 9:00 A.M., Courtroom A, United State Courthouse, 940 Front St., San Diego, CA 92101-8900, to consider approval of the proposed settlement of this action for, among other consideration, $1.8 million; certification of a plaintiff class; Class Counsel's application for attorney's fees and reimbursement of expenses; and related matters in the action.
As reported by the Company’s FORM 10-Q for the quarterly period ended December 31, 2005, in an amended complaint, the plaintiffs limited their claims to claims against the Company and its Chief Executive Officer. In response to a motion to dismiss, the Court further limited plaintiffs’ claims to allegations of market manipulation and insider trading. The En Pointe defendants have answered the amended and limited complaint. The Court certified the case as a class action.
The original class action law suit was filed alleging violations of the federal securities laws (including Sections 10(b) and 20(a). The lawsuit alleges that En Pointe and certain management insiders participated in a scheme to artificially inflate the Company's stock price and misrepresent the condition of its business. The complaint alleges that En Pointe issued a series of false and misleading statements during the Class Period that allowed insiders to divert almost $50,000,000 of shareholders' money. According to the complaint, this scheme included creating artificial demand for the stock, refusing to execute sell orders, and misrepresenting En Pointe's ownership interest in Supply Access, Inc. The complaint specifically alleges that while the stock was inflated to over $45.00 a share, insiders dumped their holdings.