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Case Page

 

Case Status:    SETTLED
On or around 10/06/2009 (Date of order of final judgment)

Filing Date: July 26, 2001

According to the Company’s Form 10-K for fiscal year ended December 31, 2002, this lawsuit is one of the more than 300 class actions that have been filed against various underwriters, issuers, and individuals in the United States District Court for the Southern District of New York. These cases have been consolidated and are in the early stages of discovery.

The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus (the "Prospectus") that contained materially false and misleading information and failed to disclose material information. The complaint alleges that the Prospectus was false and misleading because it failed to disclose (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted SmartDisk shares in the IPO 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 to those customers in exchange for the customers' agreement to purchase SmartDisk shares in the after-market at pre-determined prices.

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