On November 8, 2002, the Court issued the Order and Final Judgment approving the settlement and awarding plaintiffs' counsel the sum of $2,000,000 in fees and for reimbursement of expenses. On June 7, 2004, the Court issued the Order distributing the class settlement fund. The case is closed.
According to the Notice of Proposed Settlement dated August 2, 2002, pursuant to the Settlement described herein, Bear Stearns shall pay to each Class Member who files an acceptable Proof of Claim an "Additional Amount" calculated in accordance with the formula set forth, which (if you have not previously been paid 100% of your out-of-pocket losses from the prior Restitution Fund), will equal either 5.5% or 12% of your out-of-pocket loss on Baron Securities. Pursuant to separate litigation by the SEC, and in substantial part as a result to the proceedings in this Action, the Defendants have previously paid $30 million (the "Original Payment ") into a fund held by the SIPC Trustee for the Estate of A.R. Baron to be used to reimburse customers of A.R. Baron, including Class Members herein, for their net losses incurred in all their dealings with A.R. Baron. To date, approximately 10%, or $3 million, of the Restitution Fund remains undistributed (the "Remaining Balance"). Bear Stearns has agreed to take further actions to have that balance distributed to Class Members herein. A hearing will be held before the Honorable
John E. Sprizzo in the United States Courthouse, 500 Pearl Street, New York, New York 10007, at 3:00 p.m., on November 1, 2002 (the "Settlement Fairness Hearing") to determine whether a proposed settlement (the "Settlement") of the above-captioned action (the "Action") as set forth in the Stipulation and Agreement of Settlement dated as of July 17, 2002 (the "Stipulation"), is fair, reasonable and adequate and to consider the application of Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses.
On January 16, 1998, the Court entered the Order granting the motion for consolidation of cases 97cv5318(JES) and 97cv6257(UA), granting the motion for appointment of lead plaintiffs, and granting the motion for approval of co-lead counsel. On April 1, 1998, an Amended and Consolidated Class Action Complaint was filed. The defendants filed a motion to dismiss the Amended and Consolidated Class Action Complaint on June 18, 1998, and the motion was denied on October 27, 1998. On January 11, 1999, the plaintiffs filed a motion for an order permitting this action to be maintained as a class action on behalf of a plaintiff class (the "Class") of persons who purchased from A.R. Baron ("Baron") the securites of the Promoted Companies and Brown Bag Companies during the period from 7/20/95 through and including 6/28/96 (the "Class Period"). On April 21, 1999, the plaintiffs further filed a motion for partial summary judgment. On May 12, 1999, the Court issued the Order denying the plaintiffs’ motion for partial summary judgment. On September 24, 1999, the Court issued the Stipulation and Order dropping certain plaintiffs in the action without prejudice. On September 20, 2000, the Court issued the Memorandum Opinion and Order #84563, granting the motion for an order permitting this action to be maintained as a class action.
The original complaint alleges that Bear, Stearns Securities, which served as Baron's clearing agent during the Class Period, acted in a capacity far greater than merely clearing Baron's trades. Instead, Bear, Stearns Securities, among other things, assumed the actual trading function for Baron with respect to Class members' purchases and sales of shares of the Promoted Companies.
The complaint further alleges that purchases and sales of shares of the Promoted Companies (listed below) were done in an unauthorized and manipulative manner, and that as a result, defendants violated the federal securities laws, including Sections 10 (b) and 20 (a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Harriton "along with a network of inter-related persons and entities, engaged in a fraudulent scheme to acquire millions of dollars in illicit profits through the improper sales of securities" in several companies whose stock was promoted by the A.R. Baron sales force.
The lawsuit is brought pursuant to Section 21 (D) (a) (3) (A) (i) of the Securities Exchange Act of 1934.
The stocks of the "Promoted Companies", involved in the lawsuit, are: Health Professionals Inc.; Cryo Medical Sciences Inc.; Cypros Pharmaceuticals Corp.; Innovir Laboratories, Inc.; Voxel, Advanced Mammography Systems Inc.; Symbollon Inc.; Aqua Care Systems Inc.; Laser Video Network; Paperclip Imaging Software; and, U.S. Golf and Entertainment Inc.