On August 10, 2005, the Court entered the Final Judgment and Order of Dismissal approving the settlement. The Court further entered the Orders awarding attorneys’fees and reimbursement of expenses and approving the plan of allocation of settlement proceeds.
According to a press release dated April 29, 2005, a Settlement Hearing will be held on July 25, 2005, at 2:30 p.m., before the Honorable Richard M. Berman, United States District Judge, Thurgood Marshall Courthouse, Courtroom 706, 40 Centre Street, New York, New York. The Hearing is to consider a settlement of certain litigation on behalf of the Class defined above. The purpose of the Hearing is to determine, among other things: whether the proposed settlement of the claims in the Action for the sum of $5,000,000 should be approved by the Court as fair, reasonable and adequate.
On April 12, 2005, the Court issued the Order Preliminarily Approving Settlement and Approving Form and Manner of Notice as entered in the Stipulation and Agreement of Settlement dated March 11, 2005. According to the Summary Notice also dated April 12, a Settlement Hearing will be held on July 25, 2005, to determine, among other things, whether the proposed settlement of claims in the Action for the sum of $5,000,000 should be approved as fair, reasonable and adequate.
The lawsuit alleges, among other matters, that during the class period, UBS Warburg distributed research reports written by former UBS Warburg Senior Telecommunications Analyst that were false and misleading because they maintained a "buy" rating on Interspeed stock while, at the same time, the Analyst was privately sending e-mails to UBS personnel indicating that he believed that Interspeed stock should be shorted. The lawsuit also charges that the Analyst’s research reports were false and misleading because he failed to disclose to the investing public his belief that Interspeed was engaging in "creative accounting."
According to the Complaint, for example, on January 3, 2000, UBS Warburg issued a research report by the Analyst that rated Interspeed a "buy." Just two days later, the Analyst privately e-mailed a member of UBS Warburg's sales force, "(d)on't put people into Interspeed -- very risky." Fifteen minutes later, the recipient of the e-mail responded, asking "so why is (Interspeed) a short?" The Analyst replied, "(j)ust lumpy revenue, some stuffing of channel, creative accounting."
The lawsuit charges that UBS Warburg's and UBS Warburg Senior Telecommunications Analyst’s motive for issuing the fraudulent analyst reports was the desire to garner investment banking fees from Interspeed. The Complaint alleges that UBS Warburg earned $700,000 for underwriting Interspeed's 1999 initial public offering. The lawsuit also charges that if UBS Warburg had published truthful reports by the Analyst, the stock price of Interspeed would have plummeted.