INCOMNET SETTLES STOCKHOLDERS' FRAUD SUIT.Byline: Dave McNary McNary may refer to:
Woodland Hills-based Incomnet Inc., which saw its shares lose three-fourths of their value due to securities fraud allegations in 1995, announced Tuesday that it has settled a shareholders' suit for $8.65 million. The company, which markets long-distance service and optical lens products, will pay $500,000 in cash and $8.15 million in securities to settle the class-action suit Noun 1. class-action suit - a lawsuit brought by a representative member of a large group of people on behalf of all members of the group class action covering shareholders who bought stock between Aug. 1, 1994, and Sept. 1, 1995. During that period, Incomnet stock rose from $10.25 to a record high of $21.75. The issue collapsed in the fall of 1995, plunging plunge v. plunged, plung·ing, plung·es v.tr. 1. To thrust or throw forcefully into a substance or place: to under $4, over the disclosure that then-Chairman Sam Schwartz Samuel I. Schwartz, a.k.a. "Gridlock Sam," is one of the leading transportation engineers in the United States, and is widely believed to be the man responsible for popularizing the phrase gridlock. He originally worked as a cabbie. had maintained a trading account Trading Account 1. An account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer. 2. An account held at a financial institution and administered by an investment dealer that the account holder uses to employ a in the stock to shield the price from short-sellers. The disclosure of the fund prompted shareholder suits against Incomnet and Schwartz, who was accused of using the account to manipulate manipulate To cause a security to sell at an artificial price. Although investment bankers are permitted to manipulate temporarily the stock they underwrite, most other forms of manipulation are illegal. the stock price. Schwartz resigned in November 1995. Incomnet, which hit an all-time low of $2.82 in April, closed down 25 cents Tuesday at $3.56. Incomnet will take a $5 million charge against third-quarter earnings, representing the combined effects of the settlement and a previously announced $3.63 million gain for the company from Schwartz in a separate settlement. Incomnet previously posted second-quarter profits of $1.3 million, or 10 cents a share, compared with $230,429 in the year-ago period. Sales were up 38 percent to $34.9 million. |
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