The original class action was commenced on behalf of a Class consisting of all persons who purchased unregistered securities from certain individuals, The Maximum Financial Group, Inc., Questar Capital Corporation or GunnAllen Financial, Inc. (collectively, ``Defendants'') or otherwise acquired the common stock between January 1, 2000 and March 4, 2008 (the ``Class Period''), against Defendants and certain of its officers and/or directors for violations of the Securities Exchange Act of 1934 and the Securities Exchange Act of 1933. The complaint charges that Defendants sold unregistered securities to class members in violation of Sections 12(1), 12(2) and 15 of the Securities Exchange Act of 1933, and in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The complaint alleges that, during the Class Period, Defendants sold class members unregistered securities in the form of interests in non-existent limited liability companies (``LLCs'') created by Defendant May and sold by Defendant Bluestein, through The Maximum Financial Group, Inc. and with the assistance of broker-dealer Defendants Questar Capital Corporation and GunnAllen Financial, Inc., in violation of federal securities laws and state laws.
On May 13, 2008, a motion to appoint Ropeta Group as lead plaintiff and to approve the selection of lead counsel was filed. The motion was granted in part, appointing the Ropeta Group as lead plaintiff and approving their choice of lead counsel pending a final decision relating to the certification of the class action. On September 2, 2008, the lead plaintiffs filed an Amended Class Action Complaint. The defendants responded by filing several motions to dismiss the Amended Class Action Complaint. These motions are currently pending before the Court.
On May 3, 2010, Defendant GunnAllen Financial, Inc., filed a Notice of Case Under Chapter 11 of United States Bankruptcy Code and Notice of Automatic Stay. On October 7, 2010, the action was dismissed as to Defendant GunnAllen Financial. On October 8, 2010, Defendant Frank J. Bluestein filed a Notice of Involuntary Bankruptcy. On January 27, 2011, the action was dismissed as to Defendant Frank J. Bluestein pursuant to bankruptcy stay.
On February 28, 2011, District Judge Julian Abele Cook granted the Defendant Questar Capital Corporation's motion to dismiss the action.