BIFS Technologies Corp Retains Law Firm of Masry and Vititoe to Handle Litigation Against Selected Market Makers.

Business Editors/Legal Writers

SARASOTA, Fla.--(BUSINESS WIRE)--May 2, 2003

BIFS Technologies Corporation (OTCBB:BIFT) today announced that it has retained the services of Masry and Vititoe to pursue litigation in behalf of the company against several Market Makers that have actively engaged in the trading of the company's stock throughout the past several years. The suit alleges that certain Broker/Dealers including Phillip Louis Trading, Herzog, Schwab Capital Markets, Hill Thompson Magid, M. H. Meyerson, Fleet Trading and others have engaged in a variety of independent manipulations of the stock during this period, and in some cases acted in collusion, to bring illegal short selling pressure and other forms of manipulation against the stock with the intent to force the price per share to lower levels. According to the complaint, these actions caused significant financial damage to the company and its shareholders and directly inhibited the company's ability to pursue planned business activities. The law firm of Masry and Vititoe (who's actions against PGE were chronicled in the movie Erin Brockavich) recently filed the legal action against these market makers in United States District Court for the Middle District of Florida. Specific allegations contained in the suit included fraud, racketeering, interference with prospective economic advantage, misrepresentation, and alleged violations of Exchange Act sections 9 and 10 and Securities Act section 12(2). The suit was filed in conjunction with an ongoing fifteen-month investigation conducted by the NASD Regulation Division into specific allegations made by BIFS Technologies against these Market Makers. The suit will attempt to prove Market Maker culpability for a variety of illegal activities by these firms, their parent corporations, and certain individual traders who were employed by these companies.

The suit specifically asserts that Market Makers engaged in naked shorting of the company's stock and have repeatedly, over the past three years, posted intentional misprints of trades that were well outside the existing market spread at the time of these transactions in order to instigate panic selling on the part of investors and to force technical weakness in the stock. Also, the suit alleges that certain broker-dealers have been working in collusion with other Market Makers and with individual customers familiar to the brokers to fabricate hundreds of odd lot transactions, which were repeatedly executed at the Bid price with the specific intent to artificially lower the price per share and instigate investor sell offs. The suit further alleges that these Market Makers, in certain cases, artificially widened the Bid/Ask spread and intentionally delayed pending customer trades or failed altogether to execute legitimate trades placed with their firms by investors at prices equal to the posted spread, in order to manipulate the stock price. Additionally, the suit will attempt to prove that certain Market Makers unfairly used confidential trade information submitted to their company by investors to guide the buying and selling activity of the Market Maker's individual trader's personal accounts.

Mr. Gus Bridi, lead attorney for Masry and Vititoe commented on the case by saying: "This case centers around a variety of well documented behaviors by Broker/Dealers that we have been monitoring for the past several years. Many of these behaviors have previously resulted in serious fines and sanctions being imposed by the courts and NASD against Market Makers in similar cases in the past. However, in addition to targeting just the recorded Broker/Dealer manipulation, which has been well documented, this case will involve challenging the legitimacy of the rules and regulations that are imposed by the NASD that govern the trading of stocks by Market Makers for OTCBB and Pinksheet exchanges. It is apparent that Market Makers took unfair advantage of the rules used by the NASD, which are not only inconsistent with the rules this agency imposes to govern the trading of stocks traded on the NYSE and National Nasdaq, but that these inconsistencies, actually created a situation that promoted harmful and damaging activities by Market Makers toward BIFS Technologies and its investors."

Bridi went on to say that "the rules that we plan to challenge in court include such practices as allowing Market Makers to short small cap stocks while showing a down tick (which we assert fosters a chronic short selling mentality among these brokers resulting in significant harm to investors) and also, that by allowing traders who work for Market Makers to trade from their personal accounts as well as their company accounts, the NASD has created a situation where these traders routinely use confidential information submitted by their customers (which indicates at what price these clients are willing to buy or sell stocks) in order to manipulate the market and that these traders unfairly applied this insider information and illegally profited by it's use. We fully expect to win this case in court and the law firm plans to subsequently use it, and other recently decided cases such as the one involving Universal Express, Inc., to establish a precedent for follow-on legal challenges of Market Maker manipulations against other publicly traded companies."

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