Metropolitan Mortgage and Securities Company, Inc. ("Metropolitan Mortgage" or the Company) is a conglomerate of insurance and investment services companies.

The original Complaint alleges that Metropolitan Mortgage and its subsidiary Summit Securities, Inc. fraudulently marketed preferred stock, debentures and investment certificates as safe, conservative investments. In reality, according to the Complaint, the securities were risky and nearly impossible to resell. The Plaintiffs allege that Sandifur, using the companies he controlled, created a sophisticated financial shell game involving hundreds of millions of dollars.

In October 2003, Metropolitan Investment Securities, the brokerage that sold securities for Metropolitan Mortgage and Summit, agreed that it had committed securities fraud in connection with the sale of Metropolitan Mortgage and Summit securities between January 1, 2001 and March 31, 2003. Metropolitan Investment Securities admitted to the National Association of Securities Dealers that it "engaged in fraudulent and deceptive sales practices" and misrepresented and omitted key facts concerning the Metropolitan and Summit securities. It also agreed that it had misled investors about the risks of Metropolitan and Summit. Metropolitan Investment Securities stipulated to a $500,000 fine and payment of nearly $3 million in refunds to specified investors, and agreed to maintain a $1 million escrow account to repay additional investors.

On December 15, 2003, Metropolitan Investment Securities closed its doors. On December 26, 2003, Metropolitan and Summit defaulted on their securities, suspending all principal, interest and dividend payments. This included securities sold prior to January 1, 2001.

NOTE: In October 2003, the National Association of Securities Dealers (NASD) alleged that the Metropolitan Mortgage's investment arm used fraudulent, deceptive and unethical sales practices. The NASD and Metropolitan reached an agreement. As part of the agreement Metropolitan was censured, fined $500,000 and forced to pay $2.8 million in restitution to certain investors. Additionally, Metropolitan neither denied nor admitted wrongdoing.

On January 30, 2004, the Plaintiffs filed a First Amended Class Action Complaint adding certain Defendants and claims to the action. On February 17, 2004, a notice of bankruptcy filing and automatic stay was filed by Defendant Metropolitan Invest. On March 9, 2004, Chief Judge Fred Van Sickle stayed all proceedings against Metropolitan Investment Securities Inc., Metropolitan Mortgage, and Summit Securities Inc. That day, those parties were voluntarily dismissed from the action. On June 7, 2004, the Court granted the motion to consolidate cases. On August 11, 2004, the motions for appointment of lead Plaintiff and approval of lead Counsel were granted. On December 20, 2004 and March 11, 2005, the lead Plaintiffs filed Consolidated and Amended Class Action Complaints.

In a press release dated October 25, 2005, investors in a failed Metropolitan Mortgage affiliate would get back $7.25 million in a proposed settlement that would also release most board members from legal liability. If approved by creditors, class action Plaintiffs and federal bankruptcy and district court judges, Summit Securities would pay the investors from an insurance pool that is used to pay legal costs for former Metropolitan Mortgage and Securities officials. The agreement proposed Monday would split the money among a trust set up to recover and repay money to creditors in the bankruptcy case, and investors who filed a class action lawsuit against the Company and its officials. Met Mortgage and its subsidiary Summit filed for Chapter 11 bankruptcy protection in February. The collapse of Met Mortgage, once valued at $2.7 billion, cost more than 10,000 investors some $450 million. The proposed settlement would include most former Summit Securities board members, who would be dropped as Defendants in the fraud lawsuit. The former Company President would be excluded. He was indicted in September 2005 on seven felony counts of misleading auditors of the Company. Metropolitan board members, along with executives and other key employees, are still named in lawsuits.

On February 13 and June 2, 2006, the Plaintiffs filed a motion to certify the class and preliminarily approve the partial settlements. The first partial settlement is called the "Summit Settlement Agreement," which is in the amount of $7.25 million obtained solely from insurance. The Summit Settlement will settle claims against certain individual Defendants. The "Metropolitan Settlement Agreement" also settles claims against certain individual Defendants in the amount of $2.6 million obtained solely from insurance. On August 1, 2006, the Court issued the Order certifying the class and preliminarily approving the partial settlements. On September 6, 2006, the Plaintiffs filed a motion for settlement approval of the partial settlement. On October 6, 2006, the Court issued the Judgment and Order finally approving the partial settlement with certain individual settling Defendants.

On October 10, 2006, the Plaintiffs filed a Second Amended Complaint and the remaining Defendants filed motions to dismiss in December 2006.

According to a press release dated November 30, 2007, on November 5, 2007, the U.S. District Court for the Eastern District of Washington partially dismissed untimely federal securities fraud claims and preempted state law claims against the Company, its individual officers and directors, its auditors, and its underwriters. The district court found that the investors' remaining claims were insufficiently pled, but the district court allowed the investors to amend the allegations. … The district court found that the investors failed to plead the §11 claims with particularity but allowed the investors to amend their pleadings. Section 11 claims were barred by three-year statute of limitations. The Sarbanes-Oxley Act requires §11 claims be filed within three years of the alleged fraud. The district court found that the Complaint was filed on Dec. 17, 2004 and dismissed all claims that arose from registration statements filed before Dec. 17, 2001. The district court allowed the investors to amend their Complaint accordingly to satisfy the pleading requirements. The district court dismissed the state claims as preempted by federal law.

On January 2, 2008, a Third Amended Complaint was filed. The Defendants responded by filing various motions to dismiss. On March 13, 2008, the Court granted the Order to dismiss certain claims against an individual Defendant.

On March 21, 2008, an Order was entered denying the Defendant’s Motion To Dismiss. On June 16, 2008, a motion to Certify Class Plaintiffs' Motion for Class Certification was submitted by all Plaintiffs.

On November 25, 2008, Judge Van Sickle signed the Order granting the motion to certify the Federal Claims Class.

On December 17, 2008, an Order Granting Settlement Class Representatives' Second Motion for an Award of Costs to Settlement Class Representatives was entered into the court.

On November 25, 2008, Judge Van Sickle signed the Order granting the motion to certify the Federal Claims Class.

On December 17, 2008, an order granting settlement class representatives' second motion for an award of costs to settlement class representatives was entered in the Court’s docket.

On January 06, 2009, an order denying motion to certify the State Claims Class was entered in the Court’s docket.

On February 08, 2010, an order was granted dismissing the Sixth Count against one of the Defendants in the matter with prejudice.

On February 12, 2010, an order preliminarily approving settlement between the class and Defendant Roth Capital Partners, LLC ("Roth") was granted by the court. The Court also entered an order bifurcating and staying claims against Defendant Roth. However, the next day (February 13, 2010) a text order vacating order preliminary approving settlement between the class and Defendant Roth was entered by the court.

On February 25, 2010, the Court entered an order granting on the Plaintiffs' Motion for Preliminary Approval. On that day, another order bifurcating and staying claims against Defendant Ernst & Young LLP was also entered before the case was dismissed as settled on March 1, 2010.

On June 09, 2010, the Court issued dual Orders Preliminarily Approving Settlement Between the Class and the individual Defendants and the accounting Defendant.

On June 21, 2010, an Order Approving Form and Manner of Notice of Settlements and Preliminarily Approving Plan of Distribution was issued by the Court.

On September 22, 2010, separate and simultaneous Judgments and Orders Approving the Respective Settlements between the Class Claims, Barring Claims for Contribution against Defendants: Ernst & Young LLP, PriceWaterhouseCoopers LLP, Roth Capital Partners, LLP, and the Individual Defendants Dismissing Indemnity, and Directing Entry Of Judgments were filed.

Additionally on September 22, 2010, an Order on Class Counsel's All Actions Motion for Fees and Costs was granted by the Court.