The original Complaint alleges that defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between August 8, 2000 and July 1, 2001, thereby artificially
inflating the price of Pro Net Link securities. Specifically, the
Complaint alleges, among other things, that certain officers and
directors of the Company knew and failed to disclose that the Company
had no intention of: (i) continuing to develop its "unique" Internet
broadcasting facility; (ii) adding personnel to its broadcast staff
during fiscal year 2001; (iii) operating the Company's broadcast
operations beyond January 2001 and had planned to transfer it to
Zagoren; (iv) renewing the marketing services contract with Zagoren's
alter ego, Zozzora, Inc., which was scheduled to expire on
February 15, 2001; and (v) broadcasting the International Aid & Trade
show, planned for June 2001. Further, the Complaint alleges that the
Company's auditors knew or recklessly disregarded that it was required
to adhere to standards and principles of GAAS, including the requirement
that the financial statements comply in all material respects with GAAP.
On September 8, 2003, the Court entered the Order granting the motion for an order to consolidate cases and granting the motion for an order to appoint plaintiff Doreen A. Labit, plaintiff Craig Zychal, movant Scott Campbell, movant Daniel P. Provost, movant Dennis Bell to serve as lead plaintiffs. Further, the Court granted the motion for an order to approve movants choice of Vianale & Vianale LLP and Gainey & McKenna as lead counsel. On November 3, 2003, the plaintiffs filed an Amended Complaint, and further amended the complaint by filing a Second Consolidated Amended Class Action Complaint on February 20, 2004. In April 2004, the defendants filed various motions to dismiss the action. On December 12, 2005, the Court entered the Opinion and Order # 92492. According to the Order, while the section 20(a) claim is dismissed without prejudice, plaintiffs are allowed 30 days in which to file an amended complaint naming PNL as a nominal defendant. In all other respects, the Section 20(a) and 20A claims are adequately pleaded. On January 6, 2006, the plaintiffs filed a Third Consolidated Amended Class Action Complaint, and the defendant Feldman Scherb & Co. filed a motion for reconsideration of the Court's Opinion and Order. The defendant’s motion was denied by the Memorandum and Order entered on April 19, 2006.
The parties soon engaged in settlement proceedings. On June 10, 2008, the Court entered the order preliminarily approving the proposed settlement in the amount of $ 1,225,000 in cash. According to the terms of the settlement outlined in the Notice of Pendency, dated June 25, 2008, the settling defendants agreed to put $225,000 into escrow. One million dollars was added to the Settlement Fund for the benefit of the Class by Marc Armand Rousso. On September 17, 2008, District Court Judge Loretta A. Preska approved the settlement, the plan of allocation and the award of attorneys’ fees and reimbursement of expenses.