In December 2006, the appellate court overturned the certification of classes in six test cases that were selected by the underwriter defendants and plaintiffs in the coordinated proceedings. Because class certification was a condition of the settlement, it was unlikely that the settlement would receive final Court approval. On June 25, 2007, the Court entered an order terminating the proposed settlement based upon a stipulation among the parties to the settlement.
This is one of a number of actions coordinated for pretrial purposes as In re Initial Public Offering Securities Litigation, 21 MC 92 with the first action filed on January 12, 2001. Plaintiffs in the coordinated proceeding are bringing claims under the federal securities laws against numerous underwriters, companies, and individuals, alleging generally that defendant underwriters engaged in improper and undisclosed activities concerning the allocation of shares in the IPOs of more than 300 companies during late 1998 through 2000. In June 2004, a stipulation of settlement and release of claims against the issuer defendants, including the Company, was submitted to the court for approval. The terms of the settlement if approved, would dismiss and release all claims against the participating defendants (including the Company). In exchange for this dismissal, D&O insurance carriers would agree to guarantee a recovery by the plaintiffs from the underwriter defendants of at least $1 billion, and the issuer defendants would agree to an assignment or surrender to the plaintiffs of certain claims the issuer defendants may have against the underwriters. On August 31, 2005, the court confirmed preliminary approval of the settlement.
According to a press release dated May 21, 2001, a complaint was filed against InterTrust Technologies and several of its executive officers and directors. The complaint alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing Registration Statements and Prospectuses that contained materially false and misleading information and failed to disclose material information. The Prospectuses were issued in connection with InterTrust Technologies's IPO and Secondary Offering. The complaint alleges the Prospectuses were false and misleading because each failed to disclose (i) The Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted InterTrust Technologies shares in the IPO and Secondary Offering in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO and Secondary Offering to those customers in exchange for the customers' agreement to purchase InterTrust Technologies shares in the after-market at pre-determined prices. Also named in the complaint are Credit Suisse First Boston Corporation, BancBoston Robertson Stevens, Inc., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Morgan Stanley Dean Witter, Inc. and Salomon Smith Barney, Inc. (collectively, the 'Underwriter Defendants').