A class action lawsuit was filed in U.S. District Court on behalf of purchasers of EConnect, Inc. (OTC:ECNC) common stock between November 23, 1999 and March 13, 2000 inclusive (the "Class Period"), including those individuals who acquired their EConnect securities in exchange for shares, ADRs, or options in other companies which were acquired by the Company.
EConnect is a provider of a merchant portal, powerclick.com, that features over 200 merchant listings aimed at generating revenues based on fees per click. Also, EConnect has "internet cash payment portals" which aim to sign up merchants and generate revenues through merchant application fees, listing fees, affiliate link fees and transaction fees. Additionally, EConnect is in the business of developing hardware and software systems designed to enable online remote, credit and ATM card based transactions, such as those used for online gambling.
According to the complaint, during the Class Period, defendants made false and misleading statements and/or omissions concerning the financial condition and business prospects of the Company, as well as the financial benefits that would enure to EConnect and its shareholders, while disregarding information which would have been of material importance to any reasonable shareholder. For example, the complaint alleges that defendants failed to disclose: (a) that, contrary to EConnect's November 23, 1999 press release, EConnect had never acquired Top Sports SA; (b) that, contrary to EConnect's February 22, 2000 press release, EConnect was not generating anywhere near $10,000 a day from its PowerClick division's network of websites; (c) that, contrary to EConnect's February 28, 2000 press release, EConnect did not have a strategic alliance with Empire Financial Group, Inc.; and (d) that, contrary to the implication of EConnect's February 29, 2000 SEC filing, EConnect did not have an agreement to use an internet cash payment system developed by SafeTpay.
According to the complaint, since the disclosure of these, and other, adverse facts would have caused a severe collapse in the price of the Company's stock, defendants set out on a scheme to conceal these facts in order to artificially inflate EConnect's stock price.
The Company's common stock traded as high as $21 on March 9, 2000, and was maintained at these allegedly inflated levels until the SEC halted trading in the shares on March 13, 2000 in view of suspicion that the Company was issuing false and misleading press releases to artificially inflate the Company's share price.

Update

This case has been settled. The Claims Administrator for this litigation is Berdon Claims Administration LLC. The deadline for submitting a proof of claim was October 12, 2001. The status of the litigation is Awaiting Warrant Issuance. If you would like further information about the settlement, please go to www.berdonclaims.com or call (800) 766-3330.
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