Starnet´s under fire again. This time trouble comes dressed in a pair of class action lawsuits filed on behalf of stockholders by law firms in Washington and Delaware.
The first of these week´s bombs was dropped by two firms--Wolf Haldenstein and Chimicles & Tikellis--on behalf of investors who purchased Starnet common stock between March 11, 1999 and August 20, 1999. The suit was filed in the United States District Court of Delaware on November 17.
The complaint charges Starnet and certain of its officers and directors with violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Rule 10b-5 promulgated thereunder. It alleges that defendants issued a series of materially false and misleading statements concerning the company's operations and the true nature of the company's business, including undisclosed risks inherent to its Internet gaming operations and that the company was soliciting wagers from customer in North America even though the company knew this to be an illegal practice. The plaintiff also alleges that, "prior to the disclosure of the adverse facts described above, certain insiders sold thousands of shares of Starnet common stock to the investing public at artificially inflated prices and realized over $3.5 million in proceeds from these insider trading activities."
Meanwhile, a Seattle firm, Keller Rohrback LLP, announced November 19 that it has jumped onto the wagon as well. The Seattle suit, packaged with four additional securities fraud suits unrelated to Intnernet gambling, coverst the same class period.
The two lawsuits join a third such lawsuit that was filed in New York in October.