According to the Stipulation of Dismissal With Prejudice filed on December 15, 2006, pursuant to Rule 41(a)(1) of the Federal Rules of Civil Procedure, the parties to this action hereby stipulate and agree that all claims Rosenbaum Capital LLC asserted, or could have asserted, in this action shall be dismissed with prejudice. The parties shall bear their own fees and costs, and waive all rights of appeal. The civil case is now terminated.
According to the Notice of Settlement of Related Litigation dated October 20, 2006, the Defendants notify the Court herein, and in the attached Declaration of Samuel J. Lieberman, regarding the completed settlement of the action entitled, Freedom Wireless, Inc. v. Boston Communications Group, Inc., et al., No. 00-12234 (EFH), which the plaintiff cites throughout the Amended Complaint.
On August 22, 2006, the Court entered the Order signed by U.S. District Judge William G. Young denying the defendants’ motion to dismiss the Amended Class Action Complaint. On October 4, 2006, the plaintiff filed a motion for class certification.
As disclosed by the Companys’ FORM 10-Q for the quarterly period ended March 31, 2006, in June 2005, a putative class action complaint was filed in the U.S. District Court for the District of Massachusetts, against the Company, the Chief Executive Officer and the Chief Financial Officer on behalf of persons who purchased the Company’s common stock between November 15, 2000 and May 20, 2005. The complaint was amended on October 12, 2005 to modify the commencement date to June 6, 2002. The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Exchange Act as well as Rule 10b-5 promulgated thereunder by allegedly failing to disclose adverse facts regarding the Freedom Wireless, Inc. lawsuit, including that the Company had willfully infringed the Freedom Wireless patents. The Company has responded to the amended complaint and filed for a motion to dismiss the suit.
Several purported shareholder class action lawsuits have been filed against Boston Communications Group and certain of its present and former executive officers alleging defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities. Specifically, the complaint alleges: (a) the Company had willingly infringed upon Freedom Wireless’ patents; (b) the Company’s successful business model was premised upon the willful infringements of the patents of Freedom Wireless; (c) the Company’s financial statements failed to comply with Generally Accepted Accounting Principles by failing to record sufficient reserves (of not less than $100 million) because of the willful infringement upon Freedom Wireless’ patents; (d) by reason of the failure to take adequate reserves, the Company’s financial statements filed with the SEC overstated income, net profits and profits per share; (e) these failures of disclosure, directly impacted upon the Company’s prospects for future growth and revenue.