The original class action lawsuit was filed against Atlas Mining Company on behalf of investors that purchased Atlas stock during the period from March 31, 2005 through and including October 9, 2007. Specifically, the complaint charges that Atlas 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 financial statements filed with the SEC during the Class Period by overstating the Company's revenue and assets.
On October 9, 2007, the Company announced that it would have to restate its financial statements for each of the reporting periods from 2004 through the current fiscal quarter as a result of improper revenue recognition practices and other violations of generally accepted accounting principles. In addition, Atlas announced it was suspending all activities at its Dragon Mine pending a review. These announcements caused Atlas' stock price to immediately drop by half -- causing investors substantial losses.
The case was ordered consolidated, and lead plaintiffs were selected on March 25, 2008. The plaintiffs filed a First Amended Consolidated Class Action Complaint on July 28, 2008, and the defendants responded by filing a motion to dismiss on October 8, 2008.
According to a press release dated July 9, 2009, Atlas Mining Company (Pink Sheets:ALMI) announced that it has entered into a settlement agreement settling the class action In Re Atlas Mining Company Securities Litigation pending in the United States District Court for the District of Idaho, Civil Action No. 07-428-N-EJL (D. Idaho). Under the terms of the settlement agreement Atlas will pay plaintiffs $1,250,000 (which includes fees to plaintiff’s counsel), to be funded by the proceeds of an insurance policy, in exchange for release of all claims against Atlas, Nano Clay & Technologies Inc., and the individual defendants. Atlas will also fund up to $75,000 to fund expenses in connection with notification to class members. The settlement agreement is the agreement contemplated by the memorandum of understanding entered into by Atlas and the lead plaintiffs described in the press release issued May 4, 2009 and the terms of it are consistent therewith.
On September 15, 2009, the plaintiffs filed a motion to certify the class. On September 25, 2009, the Court entered the Order adopting the June 5, 2009, Report and Recommendation granting Defendant CBN’s motion to dismiss. The Court dismisses without prejudice the First Amended Consolidated Class Action Complaint as to Defendant CBN. Failure to file an amended complaint by this date shall result in the dismissal of Plaintiffs' claims against Defendant CBN with prejudice.
On September 30, 2009, Judge Edward J. Lodge certified the settlement class and preliminarily approved the settlement. A Fairness Hearing is set for January 19, 2010. On November 9, 2009, the lead plaintiffs filed a Second Amended Consolidated Class Action Complaint. On January 15, 2010, the defendants filed two motions to dismiss the Second Amended Consolidated Class Action Complaint.
On January 31, 2010, Judge Edward J. Lodge granted the motions to approve the settlement, approve the plan of allocation and awarded attorneys’ fees and reimbursement of expenses. The Court entered the Final Judgment and Order on February 10, 2010, and the case was dismissed with prejudice.
On September 1, 2010, Judge Mikel H. Williams recommended that the defendants' pending motions to dismiss, filed on January 15, 2010, be granted.