On November 22 and 25, 2002, the defendants filed two separate motions to dismiss. On July 1, 2003, the Court entered the Memorandum, Opinion, and Order signed by U.S. District Judge John R. Tunheim granting the defendants’ motions to dismiss the complaint. The complaint was dismissed with prejudice and Judgment was entered.

According to a Press Release dated 9/27/02, MJK Clearing raised more than $25 million from its sales to investors of the Secured Demand Notes. The complaint alleges that the sales of the Secured Demand Notes were in violation of sections 12 and 15 of the Securities Act of 1933 (the "Securities Act"). Due to such violations, as the complaint alleges, the action seeks recission and compensatory damages.

NOTE: Claims for violations of the Securities Act are asserted against MJK's senior officers, members of MJK's Board of Directors and MJK brokers who sold the Secured Demand Notes. MJK Clearing is not named as a defendant because it is subject to the protection of "automatic stay" under the bankruptcy code.