According to the Order entered on October 26, 2004, U.S. District Judge Douglas P. Woodlock approved the settlement as to the Individual Settling Defendants, certified the class action, and dismissed the action with prejudice. The Plan of Allocation was further approved and Plaintiffs’ Counsel was awarded attorneys’ fees in the amount of 33% of the Settlement Fund and $45,572.00 in reimbursement of expenses with interest earned. Lead Plaintiffs and certified Representative Plaintiffs were also awarded their reasonable costs and expenses, paid from the Settlement Fund. The case is closed.
In the Stipulation of Settlement filed on August 13, 2004, an all-cash Settlement Fund was established in the amount of $565,000 plus interest. Earlier, by the Order dated October 24, 2001, the Massachusetts District Court appointed George Rhodes, Sara Rhodes, and Abbey Blatt as Co-Lead Plaintiffs (the “Representative Plaintiffs”) and approved the selection of Wolf Popper LLP to act as Plaintiffs’ Lead Counsel. By Order filed November 30, 2001, the New Mexico District Court transferred that action to the District of Massachusetts. Also on November 30, 2001, Plaintiffs served and filed their Amended Class Action Complaint (the “Complaint”).
On January 7, 2002, Defendants moved to dismiss the Complaint. After full briefing and a hearing, by Memorandum and Order dated August 27, 2002, the District Court denied Defendants’ motions to dismiss. On November 13, 2002, Muse filed a Voluntary Petition under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Mexico (the “Bankruptcy Court”). On December 31, 2002, Plaintiffs and Individual Defendants entered into a stipulation and proposed order certifying the Class herein. The stipulation and order was endorsed by the District Court on January 9, 2003. After the motions to dismiss were denied, the automatic stay of discovery provision of the Private Securities Litigation Reform Act (the “PSLRA”) was lifted and discovery commenced.
The complaint charges Muse Technologies, Inc. and certain of its former and current officers and directors with violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and other provisions. Specifically, the Complaint alleges that the defendants engaged in a plan to inflate the price of Muse common stock by misstating and/or concealing material information concerning the Company’s financial condition. Defendants falsely reported that none of the Company’s current assets consisted of securities when as significant portion of the Company’s current assets had secretly been invested in high-risk securities in a Merrill Lynch account which lost 85% of their value. Muse filed a 10-Q said that no money was invested in securities. Defendants acted with scienter (knowledge) in that they knew that the public documents and statements were materially false and misleading.
Several purported class action complaints have also been filed in the U.S. District Court for the District of New Mexico.