On February 10, 2003, Notice of Voluntary Dismissals were filed by plaintiffs George Essenmacher and Barbara Rizzo, pursuant to Rule 41(a)(1)(i) of the F.R.C.P. According to the Notices, the plaintiffs voluntarily dismiss, in its entirety, the complaint filed as to all named defendants. No party in this action has either answered the complaint or filed a motion for summary judgment, and no party will be prejudiced by the dismissal of this action.
On December 24, 2002, the Court entered the Order consolidating all cases. According to the Order, the actions captioned Essenmacher v. Merrill Lynch & Co., Inc. and Henry Blodget, 02-CV-10172 (E.D.Mich.) and Rizzo v. Merrill Lynch & Co., Inc. and Henry Blodget, 8:02CV1390-T-26 (M.D. Fla.) were transferred to the U.S. District Court for the Southern District of New York, pursuant to the order of the Judicial Panel on Multidistrict Litigation, 02md1484. The actions, brought on behalf of purchasers of the common stock of Lycos, Inc. shall be maintained under In re Merrill Lynch & Co., Inc. Lycos, Inc. Research Reports Securities Litigation.
According to a Press Release dated July 11, 2002, the Complaint alleges that Merrill Lynch and its well-known former Internet stock analyst Henry Blodget violated the federal securities laws by knowingly issuing false and misleading analyst reports regarding these "new economy" companies during the Class Period. Based on e-mails and other internal Merrill Lynch communications, which were made public as a result of the investigation conducted by the New York State Attorney General, Eliot L. Spitzer, the Complaint alleges that Defendants failed to disclose a significant
conflict of interest between their investment banking and research departments.
Specifically, the Complaint alleges that Henry Blodget and other Merrill Lynch
analysts issued very favorable analyst reports regarding these "new economy"
companies to the public when they allegedly knew that the positive
recommendations were unwarranted and false.
The Complaint further alleges that, unbeknownst to the investing public, Merrill Lynch's buy recommendations and price targets for these "new economy" companies were driven by its efforts to attract lucrative investment banking business from these "new economy" companies rather than by the companies' fundamental merits.
Lycos, Inc. investor pursues shareholders' rights Claim against Merrill Lynch after Learning of the $100 Million Settlement with the New York Attorney General. Recently, the New York Attorney General, Eliot L. Spitzer lodged a similar probe against Merrill Lynch concerning Aether Systems and other "new economy" companies. Eliot L. Spitzer's published probe discusses: Buy.com, GoTo.com (n/k/a Overture Services (Nasdaq: OVER)), iVillage (Nasdaq: IVIL), Looksmart (Nasdaq: LOOK), Mypoints.com, Quokka Sports (PNK: QKKAQ.PK), Webvan (PNK: WBVNQ.PK), and Lifeminders (n/k/a Cross Media Marketing Corp (Amex:XMM)). Subsequently, Merrill Lynch agreed to pay $100 million to settle these charges. Then, on June 5, 2002, Eliot L. Spitzer was reported as saying that "investors should use (the published probe) to regain some of their stock losses."