The PR doesn't quite make any sense to me. Note that the headline reads "Hitsgalore.com Announces Dismissal of Appeal", yet the first line reads "Hitsgalore.com, Inc... has entered into a Stipulation to Voluntarily Dismiss Appeal." The word "voluntarily" would appear to imply some sort of mutual (settlement?) agreement.
HITT's attorney, Daniel J. Becka, is then quoted as saying "The dismissal of the appeal from the District Court's judgment in favor of the Company will definitively conclude the federal class action lawsuit..." (emphasis added). Yes, the lawsuit is now officially over, but if it was voluntarily dismissed, was it really in favor of HITT? I suppose HITT is entitled to their opinion.
Becka then does his best to imply that the dismissal of the class action lawsuit spells doom for Bloomberg reporter David Evans whom HITT has sued for defamation for an article in which he "falsely implied that the Company had lied to the Securities and Exchange Commission in a February 1999 filing." I agree with Becka that the Bloomberg article precipitated a sell-off of HITT stock which then got the attention of Milberg and Weiss. However, I strongly disagree that people were concerned whether or not HITT was obligated to disclose that its founder, Dorian Reed, failed to disclose past indiscretions. Rather, they were concerned at the indiscretions themselves, i.e. that "Dorian Reed, and two co-defendants were ordered by a federal judge in Baltimore last month to pay $613,110 to 100 customers of Internet Business Broadcasting..." (see siliconinvestor.com. I mean, had Evans written "although Reed is absolutely not obligated to disclose he's a convicted felon and absolutely not obligated to disclose he has also been accused by the FTC of lying to investors..." would investors not have sold? Give me a break.
Becka then goes on to say that the dismissal of the case implies "the federal judge essentially ruled that the Company did not make any material misrepresentations with respect to the Form 8-K." I disagree with this conclusion as well. The class action lawsuit had many other very strong, IMO, allegations. Are we also to infer that the judge also essentially ruled that HITT did adequate due diligence with regard to the Life Foundation Trust? Of course not. Considering the Bloomberg case is still active, one has to wonder if Becka wrote those words for publication or Reed decided himself to include them.
- Jeff |
