Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: badgerstate who wrote (25691)	3/23/2001 12:39:51 PM
From: Roger Sherman	Read Replies (4) \| Respond to of 28311

Regarding any litigation against Jain or INSP... I've heard rumors that something might be up, but it's only a rumor at this point, so I don't give it much credence. I've also heard a rumor that INSP may be having some current problems with the United States Dept. of Labor, but again, it may amount to nothing but a rumor. Other than that, all I've read regarding litigation against Jain and/or INSP is pretty well summed up in the following article, which was posted on the Web less than 2 months ago, about a week after the little "management shake-up" was announced on 1/22/2001: (NOTE: Go to pages 2-3, scroll to the right-hand column, for a side article regarding the litigation) THE STANDARD Blurry Future* January 29, 2001 By Dominic Gates thestandard.com (Exerpts of the side column article, bold added) INTO THIN AIR In the last three years, six lawsuits have been filed against Naveen Jain and his company, alleging that Jain reneged on promises of stock-option grants. InfoSpace (INSP) has already paid out millions of dollars to settle four of those suits. Two are still pending. The latest, brought by current InfoSpace VP John Richards, significantly raises the stakes. Filed in December under federal racketeering laws, which authorize triple damages, the suit alleges an ongoing pattern of fraud. InfoSpace vigorously denies the charges. Such suits are increasingly common, according to corporate lawyers. The first employees of Internet startups were typically showered with large blocks of options at low strike prices an enticement easily wielded by CEOs of revenueless companies. Now, some former employees are complaining that companies are refusing to honor those promises. Cisco (CSCO) , Broadcom (BRCM) , Oracle (ORCL) and Qualcomm have all been hit with stock-option suits. InfoSpace, though, has a recurring problem. In response to the initial lawsuits, the company admitted in a 1998 SEC filing that in its early days InfoSpace's "procedures with respect to the manner of granting options to new employees were not clearly documented." In other words, Jain managed to attract experienced executives with stock-option promises that were never put into writing. Richards' suit alleges that Jain's behavior goes beyond sloppy record-keeping. According to the complaint, Jain lured executives to the company, used their contacts and industry relationships to build his business and then repeatedly reneged on his promises. "That lawsuit is absolutely, positively without merit," says Jain. "We are going to defend it vigorously." Other suits against Jain and InfoSpace never made it to court Robert Hoffer, a vice president who was fired four months after he was hired, settled Jan. 15 for an undisclosed amount Mark Kaleem, another InfoSpace VP, settled a similar suit in February 1999 for $4.5 million. Kent Plunkett, now CEO of Salary.com, filed suit after he was fired, he says, for refusing to voluntarily reduce his own stock-option grant. That suit was settled last March for $10.5 million. - D.G.