According to the docket, on August 21, 2001, U.S. District Judge Milton Pollack issued the Memorandum dismissing the complaint without prejudice, and allowing the plaintiffs 30 days to refine their pleadings to proper allegations and proportions and to file an amended complaint. On October 5, 2001, the Court entered the Stipulation and Order of dismissal of the action pursuant to Rules 41(a) and 23(e) of the FRCP and without costs to either side. The case was closed.
The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements designed to, and successfull encouraging, individual investors, including members of the Class, to purchase securities of eBay based not on objective analyses, but rather on defendants' desire to attract and retain eBay's investment banking business. Furthermore, defendant Meeker's ratings, recommendations, and positive comments regarding eBay during the Class Period were also improperly influenced by her desire to increase her undisclosed personal compensation, which depended in large part upon the amount of investment banking business she generated for defendants. Specifically, Meeker's conflicts of interest remained undisclosed as she issued "inflated" ratings and recommendations for eBay. Meeker knew that the financial condition and future business prospects of eBay did not support her positive comments and recommendations, but she nevertheless issued positive reports encouraging investors, including members of the Class, to purchase shares of eBay even in the face of legitimate contrary research entering the marketplace. Meeker knowingly issued inflated ratings for the purpose of improperly benefitting herself and Morgan Stanley.