According to the lead counsel's web site, on July 11, 2003, the Court granted final approval of the settlement in this case. By the Notice of Pendency and Proposed Settlement, the case settled in the amount of $1,120,000.
The complaint asserts claims for violations of the federal securities laws (Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5) against the former secretary and director of Teletek and former President of Teletek's wholly-owned subsidiary, Hi-Rim Communications, Inc.; the legal counsel for Teletek during part of the Class Period; and KPMG Peat Marwick LLP ("KPMG"), Teletek's independent auditor during part of the Class Period (collectively, the "defendants").
Specifically, the complaint alleges, among other things, that during the Class Period
defendants, on behalf of Teletek, issued false and misleading press releases
and annual and quarterly reports misrepresenting Teletek's financial
performance and condition, its costs of operation, and its business prospects,
while failing to disclose that the price and trading volume of Teletek stock
was manipulated through an ongoing scheme of bribing stock brokers. The
complaint further alleges that KPMG was engaged by Teletek to provide
independent auditing, accounting and consulting services, including auditing
Teletek's financial statements for the fiscal year ended June 30, 1996, and
that the legal counsel was engaged to provide independent legal advice and opinions in connection with the company's filings with the Securities Exchange Commission.
The complaint alleges that each of the defendants participated in the
preparation of, and/or sanctioned the public statements and official filings
while having access to, and willfully disregarding, contradictory material non-
public information. These false and misleading statements served to keep the
price of Teletek stock artificially high. On November 7, 1996, when a federal
grand jury announced the indictment of certain Teletek officers and directors
in connection with these charges, and again, on March 20, 1997, when Teletek
announced the discovery of accounting "irregularities" and the resignation of
a company officer and director, Teletek's stock price plummeted. As a result,
Teletek shareholders who had purchased the stock at artificially inflated
prices suffered millions of dollars in damages.
NOTE: The action is related to another class action currently
pending in the District of Nevada, Seoane, et al. v. Swan, et al., Case No. CV-
S-96-01114-HDM (the "Related Action"), which named Teletek and certain of its
officers and directors as defendants. Further investigation during the
pendency of that litigation uncovered evidence implicating the additional
parties, necessitating the filing of this current action.