According to the Company’s FORM 10-K For The Fiscal Year Ended December 31, 2001, the Company and certain current and former officers and directors were named as defendants in the class action lawsuit alleging violations of the federal securities laws. Prager v. Knight Trading Group, Inc. et al., alleged, generally, that the Company improperly traded securities for its own account in advance of trading securities for broker-dealer clients in the pre-market period. Upon the Company’s motion, and pursuant to an Order of the United States District Court, District of New Jersey, dated July 17, 2001, the action was dismissed with prejudice. The plaintiff appealed the dismissal by filing a Notice of Appeal in August 2001. To avoid the time and expense involved with the Appeal, the Company reached a settlement for an amount, not material to the Company, and plaintiff has dismissed the appeal with prejudice.
NOTE: This case was originally filed in New Jersey Superior Court of Hudson County, and was removed to the U.S. District for the District of New Jersey by the notice of removal entered on June 6, 2000.