Digital Island, Inc. provides telecommunications services to businesses.

The original Complaint alleges that Defendants violated sections 14(a), 14(e), 14(d)(7) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 14d-10 promulgated thereunder, by failing to disclose material information to those Digital Island shareholders who had received an Offer to Purchase from Defendant Cable & Wireless in May and June 2001, and to those Digital Island shareholders who received a proxy statement in connection with the merger between Digital Island and Cable & Wireless (the Proxy Statement), which was consummated on August 30, 2001. In particular, Defendants failed to disclose important contracts between Digital Island and Bloomberg, LLP, and Digital Island and Major League Baseball's Internet media. Those contracts were not disclosed either in the Offer to Purchase or the Proxy Statement. Defendants also violated the all-holders provision of the Williams Act by giving additional consideration to directors and officers of Digital Island, who were also shareholders, in excess of that given to other Digital Island shareholders as an inducement to support Cable & Wireless's Offer to Purchase.

In an article dated September 23, 2002, a federal judge in Wilmington, Del., has found that a class action securities fraud suit challenging Cable & Wireless PLC's acquisition of Digital Island Inc. relied on group pleading, guilt by assumed knowledge and other vague allegations that were outlawed by the Private Securities Litigation Reform Act of 1995. He said plaintiffs had virtually no specifics to back up their charges that the Digital Island board was rewarded for selling the Company cheaply during the dot-com downturn. In re Digital Island Securities Litigation, No. 02-057 (D. Del., Sept. 10, 2002).

According to the docket posted, on September 10, 2002, the Court entered the Order granting the Defendants' motion to dismiss the Complaint with prejudice, and the case was closed. Further, on November 25, 2002, the Court entered the Memorandum and Order denying the Plaintiff's motion to alter the Judgment. As a result, the Plaintiff filed a notice of appeal. On June 16, 2004, the Court entered the certified copy of the Judgment from the Third Circuit Court of Appeals. The decision of the U.S. District Court was affirmed.