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Case Status:    SETTLED
On or around 06/25/2007 (Settlement hearing date)

Filing Date: August 25, 2004

According to the docket, on September 18, 2007 the Court entered the Final Judgment of Dismissal and Award Of Attorneys' Fees And Reimbursement Of Expenses, which provides 30% of the settlement, or $480,000 and recovery of $73,427.54 in litigation expenses.

On June 19, 2007, the Court entered the Order by Judge Martin J. Jenkins granting the Motion for Preliminary Approval of Settlement and Directing Notice and Scheduling Hearing Date.

On April 29, 2005, the plaintiff filed a Consolidated Amended Class Action Complaint against the remaining defendants. On July 5, 2005, the two remaining individual defendants filed a motion to dismiss the Consolidated Amended Class Action Complaint. Before any ruling on the motion to dismiss, a settlement was reached. On April 25, 2007, the plaintiff filed a motion for settlement. According to the motion, the settlement amount is in the amount of $1,600,000.

As disclosed by the Company’s Form 10-KSB For the Fiscal Year Ended December 31, 2004, the class-action case was withdrawn in early 2005 as to the Company, but the officers are still defendants. Due to the significant costs and time to complete the aforementioned audit committee investigation, the de-listing of the Company’s securities, and the class-action suit against the Company during a transition period for the Company from selling hardware products to exclusively selling software and related services, management and the Company’s board of directors made a decision to file for protection under Chapter 11 of Bankruptcy Code and did so on January 20, 2005.

The original complaint alleges defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period. The complaint alleges that defendants engaged in a 'pump and dump' scheme that enabled Company insiders to profit at the expense of class members by selling over a million shares of their personally held First Virtual securities at artificially inflated prices. Specifically, defendants issued materially false and misleading statements about the Company's financial condition and sales of its real-time rich media communications software and services and specialized networking hardware equipment worldwide, and a contract to provide the United States Air Force with the Company's proprietary Click to MeetTM web communications infrastructure and solutions. In reaction to these statements, the price of First Virtual stock skyrocketed 161% between February 5, 2004 and April 6, 2004, allowing certain Company insiders to sell over 1.98 million shares of their personally held First Virtual stock for proceeds of more than $8.5 million.

On April 30, 2004, the truth about the Company's financial condition began to emerge. On that day, defendants announced that the Company's audit committee had commenced an investigation into certain irregular sales transactions, and that until the review was completed, the Company would not be able to release its first-quarter earnings or file its Form 10-Q with the SEC. In reaction to this news, the price of First Virtual stock fell 37% from its previous day's closing price. As a result of its failure to comply with the SEC's filing requirements, First Virtual's securities were subject to delistment from the Nasdaq SmallCap market. On August 5, 2004, defendants announced that the Company had received a letter from Nasdaq which granted the Company a conditional temporary extension to file its first quarter 2004 report. On August 17, 2004, defendants disclosed that (i) the Company could not meet the conditions of its temporary filing extension; (ii) the Company had incurred $2.1 million in expenses directly related to the investigation; (iii) the Company was in danger of defaulting on a $3.0 million credit facility agreement; and (iv) based on the Company's profit and loss projections for the remainder of 2004, its stockholder equity would fall below Nasdaq's listing requirements. On August 24, 2004, before the market opened, defendants disclosed that the Company's request for an extension to comply with Nasdaq's listing and filing requirements had been denied, and that the Company's securities would be delisted from the Nasdaq SmallCap at the commencement of trading on August 25, 2004. In reaction to that news, the price of First Virtual stock fell 47 percent from its previous trading day's closing price, to close at $0.37 per share.

COMPANY INFORMATION:

Sector: Technology
Industry: Software & Programming
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: FVCC
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. California
DOCKET #: 04-CV-03585
JUDGE: Hon. Fern M. Smith
DATE FILED: 08/25/2004
CLASS PERIOD START: 03/29/2004
CLASS PERIOD END: 08/23/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  2. Milberg Weiss Bershad & Schulman LLP
    355 South Grand Avenue, Suite 4170, Milberg Weiss Bershad & Schulman LLP , CA 90071
    213.617.9007 213.617.9185 · info@milbergweiss.com
  3. Murray, Frank & Sailer LLP
    275 Madison Ave 34th Flr, Murray, Frank & Sailer LLP, NY 10016
    212.682.1818 212.682.1892 · email@murrayfrank.com
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 04-CV-03585
JUDGE: Hon. Fern M. Smith
DATE FILED: 04/29/2005
CLASS PERIOD START: 03/29/2004
CLASS PERIOD END: 08/23/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bramson, Plutzik, Mahler & Birkhaeuser, LLP
    2125 Oak Grove Road, Suite 120, Bramson, Plutzik, Mahler & Birkhaeuser, LLP, CA 94598
    925.945.0200 925.945-8792 · info@bramsonplutzik.com
  2. Milberg Weiss Bershad & Schulman LLP
    355 South Grand Avenue, Suite 4170, Milberg Weiss Bershad & Schulman LLP , CA 90071
    213.617.9007 213.617.9185 · info@milbergweiss.com
  3. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  4. Schatz Nobel Izard P.C.
    One Corporate Center, 20 Church Street , Schatz Nobel Izard P.C., CT
    860.493.6292 860.493.6290 · info@snlaw.net
No Document Title Filing Date
No Document Title Filing Date