According to the latest docket, defendant Ernst & Young LLP was not part of the settlement. After the Second Amended Consolidated Complaint was filed on December 13, 2004, Ernst & Young was the only defendant to respond to the complaint by filing a motion to dismiss the Second Amended Consolidated Complaint on January 21, 2005. After the settlement was finally approved with the other defendants on June 27, 2005, U.S. District Judge Jeffrey S. White signed the Order granting remaining defendant Ernst & Young's Motion to Dismiss the Second Amended Complaint. The Order was entered on July 25, 2005.

As summarized by the Company’s FORM N-CSR dated June 30, 2005, the lawsuits were consolidated into a single action and a consolidated amended complaint was filed in July 2003. In September 2003, the defendants filed a motion to dismiss the consolidated amended complaint, which motion was granted by the Court in July 2004 with leave for plaintiffs to file an amended complaint. After the Court's order and before the plaintiffs filed an amended complaint, in or about September 2004, the Company, the Adviser and certain other defendants, without admitting any liability, entered into a settlement with the alleged class whereby the Funds and the Adviser are to make certain corporate governance changes and the Adviser is to pay the plaintiff's attorneys certain fees and costs of class notice in exchange for dismissal of the class action lawsuit and complete release of liability. After the settlement was reached, the plaintiffs filed a further amended complaint against all defendants. All parties involved in the settlement agreed not to respond to the further amended complaint until after the Court considered the settlement. On June 27, 2005, the Court issued an Order approving the settlement and entered Final Judgment dismissing the case. On the same day the Court also granted the plaintiffs' motion for attorneys' fees in the amount of $340,000.

In early June 2002, a similar, purported class action filed in the U.S. District Court for the District of Delaware was transferred to the Eastern District of Wisconsin. On July 1, 2002, the Court entered the Order by U.S. District Judge Charles N. Clevert consolidating the nine actions under Case No. 01-CV-1264. Further, the judge granted the defendants’ motion to transfer venue. The actions were transferred to the U.S. District Court for the Northern District of California.

The original complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The complaint is seeking to recover damages caused by defendants' violations of federal securities laws and pursue remedies under the Securities Exchange Act of 1934.

The complaint alleges that Van Wagoner Emerging Growth Fund issued false and misleading statements to the public about Ernst & Young, LLP failing to follow Generally Accepted Accounting Practices and Generally Accepted Auditing Standards by specifically approving the changes in net assets utilized by Van Wagoner between the end of 1999 and the end of 2000. These statements were materially false and misleading because (1) the NAV of the Fund was materially overstated as the Fund had overvalued a material portion of its holdings of certain private placement investments; (2) the Fund's performance was materially overstated as those figures were based on the Fund's NAV, which figures were materially overstated because the Fund had materially overstated NAV; and (3) the risk of investing in the Fund was materially understated as the Fund had failed to disclose the true risk attendant to its portfolio securities and specifically the private placement investments. Accordingly, defendants' statements about the risks associated with investing in the Fund were not meaningful because they failed to advise investors that the Fund was materially overstating its NAV.

The complaint further alleges that on June 30, 2001, defendants' gross overvaluation of the private placement investments was disclosed when defendants revalued nine such private placement investments originally valued at $28.6 million on December 31, 2000 to a total of $9.00 and marked down an additional two holdings by precisely 50% or 75%. During the class period, the Fund's value decreased by approximately 75%.