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Case Page

 

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

Filing Date: August 22, 2001

On November 05, 2001, an order was entered to consolidate the IPO cases into one with the case number 01-CV-7866. In addition, an omnibus order was entered on June 07, 2002 to approve the appointment of a certain individual as lead plaintiff and the selection of lead counsel. At the same time, an amended complaint was also filed. There is no final judgment yet and the case is still open.

According to a Press Release dated August 23, 2001, the complaint alleges that defendants violated the federal securities laws by issuing and selling Virage common stock pursuant to the June 28, 2000 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. Specifically, the complaint alleges that in exchange for the excessive commissions, defendants allocated Virage shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Virage stock rocketed upward (a practice known on Wall Street as ``laddering'') was intended to (and did) drive Virage's share price up to artificially high levels. This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying stock at the IPO price and then selling it later for a profit at inflated aftermarket prices.

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