On September 05, 2008, the defendants filed a motion to dismiss the amended class action complaint. On May 05, 2008, a first amended class action complaint was filed by the new plaintiff.
On March 05, 2008, a minute order was granted on a motion to appoint lead counsel and lead plaintiff.
On June 12, 2007, the plaintiff filed a notice of voluntary dismissal, and the initial class action was dismissed without prejudice the following day. The class action is continuing in a similar class action, captioned Stevens v. Inphonic, Inc. et al, civil docket number 07-cv-00930, filed on May 18, 2007.
The initial complaint filed on May 7, 2008, charges that Inphonic and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements concerning the Company's 2006 fiscal year financial results in violation of the federal securities laws and generally accepted accounting principles. The Complaint alleges that during the Class Period the Company materially misrepresented its net income for the fiscal year ended December 31, 2006 and the interim second, third, and fourth quarters. The Complaint also alleges that the Company improperly recognized revenues for certain cancelled consumer contracts, as well as other errors in the income statement. The Complaint alleges that the cumulative effect of all these errors caused an aggregate net loss of at least $43 to $49 million for fiscal 2006, as compared to the $17.3 million net loss from continuing operations the Company preliminarily announced for fiscal 2006. The Complaint also asserts that certain officers and directors of the Company were able to sell significant amounts of stock during the Class Period while the stock was artificially inflated. As a result of these adverse events, the Complaint asserts that shareholders were damaged.
On September 30, 2009, an order granting in part and denying in part the motion to dismiss was entered into the court record.