The United States Court of Appeals, on February 28, 2006 issued an order vacating the lower court's decision to dismiss defendants Radin Glass, LLP and CBIC Oppenheimer and remanding the case back for further review. On May 26, 2006 the lower court again maintained it's dismissal with prejudice opinion with regards to the third party defendants, and once again the plaintiffs appealed the decision. This time, on July 25, 2007 the USCA agreed with the lower court's decision to dismiss the section 11 charges but stated, "We hold the district court did abuse its
discretion by dismissing with prejudice the § 10(b) claim, which the plaintiffs attempted to cure with new and more specific allegations indicating that CIBC and Radin acted recklessly by failing to check facts each had a duty to monitor, and the
§ 12(a)(2) claim against CIBC, for which the plaintiffs added allegations meant to establish their standing and demonstrate the timeliness of their claim." With that decision, the case has once again been remanded to the lower court for review.
On August 29, 2003, the Court entered the Order signed by U.S. District Judge John D. Bates granting the motion to consolidate the cases. On September 29, 2003, the plaintiffs filed a Consolidated Amended Class Action Complaint, and on December 12, 2003, the defendants Radin Glass & Co., LLP, and CBIC Oppenheimer filed motions to dismiss. On August 9, 2004, the Court entered the Order granting the defendants’ motions to dismiss. After the plaintiffs' motion for reconsideration of defendants Radin and CBIC's dismissal was denied, the plaintiffs have filed a notice of appeal. Meanwhile, on January 28, 2005 a final judgment and order of dismissal was issued with regards to a settlement between the plaintiffs and InterBank's CEO.
The Complaint, filed in the United States District Court for the District of Columbia, alleges that the defendants violated the federal securities laws by knowingly issuing false and misleading statements regarding the past performance of InterBank securities, the ability of InterBank to make interest payments, and the true nature and amount of inter-fund transfers necessary for InterBank to operate. Specifically, the Complaint alleges that the defendants failed to disclose millions of dollars in loan losses and the impact of those losses on return statistics and financial statements published by InterBank. The Complaint further alleges that the defendants concealed the fact that interest payments to investors were made in significant part out of current or future offering proceeds, not out of income. The Complaint also alleges that defendants failed to disclose InterBank's ability to operate depended on tens of millions of dollars of inter-fund transfers.