Mamma.comCohen Milstein serves as court-appointed lead counsel for a class of investors who purchased the common stock of Mamma.com, Inc. (“Mamma.com” or the “Company”) between March 2, 2004 and February 16, 2005 (the “Class Period”), pending before Judge Harold Baer of the United States District Court for the Southern District of New York. On July 29, 2005, Plaintiffs filed their Consolidated Amended Class Action Complaint. Plaintiffs’ complaint alleges that, during the Class Period, Defendants failed to disclose that Defendant Irving Kott, who had a long history of criminal activity and stock fraud, owned, influenced, and controlled the Company. Defendants’ failure to disclose Kott’s ownership and control of the Company, Plaintiffs allege, resulted in Defendants’ knowing or reckless misrepresentations as to: (a) the ownership of Mamma.com; (b) the role of Mamma.com’s management and board of directors in exercising leadership over the Company; (c) the adequacy of Mamma.com’s internal controls and risk disclosures; (d) the Company’s compliance with its published ethical standards; (e) Mamma.com’s compliance with securities laws and regulations; and (f) the risks of investing in the Company. Plaintiffs allege that throughout the Class Period, Defendants consistently issued materially false and misleading statements about Mamma.com and its relationship with Defendant Kott. The effect of these misstatements was to artificially inflate the price of the Company’s stock. Defendants were motivated to maintain the Company’s stock price at artificially inflated levels, according to Plaintiffs, in order to liquidate over 40% of their privately-held Mamma.com stock at a substantial profit and in order to use the stock as currency to acquire the assets of two other companies and to conduct a private placement which would generate working capital for the Company. On February 15, 2005, Plaintiffs allege, investors began to learn the truth about the Company, which Defendants had actively concealed during the Class Period. Specifically, Defendants revealed that PricewaterhouseCoopers had refused Mamma.com’s 2004 audit engagement and that the Company had launched an independent investigation into news reports that an individual and persons acting jointly or in concert with Defendant Kott had a controlling influence on the Company as a result of undisclosed holdings. As a result of Defendants’ disclosure, shares of the Company’s stock fell over 40% on February 16, 2005, to a low of $3.66 per share as compared to the prior day’s close of $6.28 per share, a decline of nearly $14.00 per share from the Class Period high of nearly $17.50 per share.
The parties signed a Stipulation and Agreement of Settlement on December 5, 2006 which provides for a settlement fund of $3.15 million. Judge Baer preliminarily approved the settlement on February 9, 2007. A fairness hearing was held before Judge Baer on July 9, 2007. On July 13, 2007, Judge Baer issued an order finally approving the Settlement.
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