To: jeffbas who wrote (569 ) 3/5/1998 7:53:00 PM From: rich evans Read Replies (1) | Respond to
Jeff and Rob and other present and Past ACTM holders: I have been in contact with the LA attorneys mentioned in the Press Release who filed the Class Action in conjunction with other attorneys in Boston and N.Y. They are in the process of further discovery and notifying Plaintiffs as required and mentioned in the post of LPASKO to Rob previously. They have also sent me the required certificate in order to participate. I am researching the law and looking into the matter at this time. Such a class action is brought under 10b-5 of the 1934 Securities Act which you have probably heard about. This statute has been interpreted by the U.S. Supreme Coiurt to require "scienter". This would be the issue in this case. Scienter according to the Court is a state of mind "embracing intent to deceive, manipulate or defraud." Later Appellate Courts with respect to the primary actors such as Mr. Pino and Mr. Greenlaw have lowered the mental state to reckless conduct. This has been defined as "involving not merely simple or even excusable negligence but an extreme departure from the standard of ordinary care, and which presents a danger of misleading buyers or sellers that is either known to the defendant or is so obvious that the actor must have been aware of it." But different Courts of Appeal have different standard for Recklessness. So it would be imporrtant to know the standard in the Massachussetts Circuit where the suit was filed. In Wisconsin the standard is the lowest, lI believe, and only requires" knew or should have known of the facts and circumstances and actively rendered assistance.. or failed to disclose material facts in violation of a duty to do so."
