A New York law firm announced Friday that it has filed a class action lawsuit in the U.S. District Court for the District of Delaware on behalf Starnet stockholders.
The complaint, filed by Bernstein Litowitz Berger & Grossmann LLP, 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 SEC Rule 10b-5 promulgated thereunder. Specifically, it alleges that between the dates of March 11, 1999 and August 20, 1999, Starnet issued materially false and misleading statements concerning the nature of the Company's business, and concealed potential liabilities stemming from its operations. During that period, several top officers and directors of the company sold thousands of shares of Starnet common stock. The complaint alleges that that the shares were sold while the officers and directors were in possession of "material adverse, undisclosed information."
The price of Starnet common stock fell by approximately 69% from its closing price of $13 1/8 per share on August 19, to close at $4 1/16 per share on August 20. Robert Gans, an attorney with Bernstein Litowitz Berger & Grossmann, said that damages could amount to tens of millions of dollars. A lead plaintiff from the class has not yet been appointed
A spokesperson for Starnet said that the company has not yet been served and will refrain from comment into it has been.