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

To: KLP who wrote (27829)	5/18/2003 2:57:57 PM
From: sandintoes	Respond to of 28311

cbs.marketwatch.com{E202561A-4013-4AAB-9686-F8ACCE3B071F}&siteid=mktw Infospace Says Court Rules Exec Made Banned Trades SAN FRANCISCO (Reuters) - A federal court has ruled that the founder and former chief executive of Internet company InfoSpace Inc. (INSP) made illegal insider stock trades, InfoSpace and a law firm representing a shareholder in the lawsuit said on Friday. Naveen Jain, who was fired from Bellevue, Washington-based InfoSpace in December and resigned from the board last month, denied any wrongdoing in an interview with Reuters and said he would ask the judge to reconsider. U.S. District Court Judge Marsha Pechman ruled that Jain made so-called "short-swing" stock transactions in which a corporate insider buys company stock and sells it within six months. The judge ruled that under the U.S. Securities Act of 1934, Jain must repay InfoSpace for profit he made from the trades, according to Seattle law firm Sirianni, Youtz, Meier & Spoonemore. The firm represented InfoSpace shareholder Thomas Dreiling in the lawsuit, which he filed on behalf of InfoSpace. Dreiling's lawyer, David Simmonds, cited court documents filed by Jain's lawyer that said Jain would have to pay $237 million if he loses. That would make it the largest insider trading award made under the law, according to the law firm. The judge found that Jain had improperly seized shares of InfoSpace from irrevocable trusts and deposited nearly 2.5 million of them into his personal account, the law firm said. Jain and his wife sold more than 2 million shares of InfoSpace on the open market within six months, netting $207 million, according to the law firm. MISTAKE 'FIXED' However, Jain said his broker inadvertently put stock in Jain's family trust account and transferred it back a few months later after realizing the mistake. "This was not really a purchase or a sale," Jain said. "I could not buy them. The shares were controlled by a trustee. They were put there in error and my broker admitted there was an error and it was fixed. Before founding InfoSpace in 1996, Jain was a senior executive at Microsoft Corp. (MSFT) . He started a new company in January, Bellevue-based Intelius, that offers Internet searches of public records. In March, InfoSpace sued Jain and another former InfoSpace executive, Kevin Marcus, and Intelius, where Marcus is chief technology officer. That suit alleges the men violated their non-compete agreements with InfoSpace and misappropriated trade secrets. Once a high flyer in the dot-com boom of the late 1990s, InfoSpace said in April it would cut about 20 percent of its work force and in May posted a $1.3 million quarterly loss. InfoSpace, a provider of wireless and Internet content and services, was one of the companies at the heart of a recent U.S. Securities and Exchange Commission probe into conflicts of interest by investment bank analysts. Merrill Lynch and former analyst Henry Blodget agreed to pay fines as part of settlements over charges they issued misleading research reports that publicly trumped up companies which analysts privately denigrated. Blodget, who agreed to pay a total of $4 million, wrote e-mails in which he expressed "enormous skepticism" about InfoSpace and called it a "powder keg," while writing about it positively in research reports. Shares of InfoSpace closed at $14.27, up 19 percent, or $2.27 on the Nasdaq. In after-hours, the stock was trading at $14.22.