Zillow, Inc. Faces Class Action Suit Over Stock

   SEATTLE - (BUSINESS WIRE) - 11/30/2012 - Securities law firm Hagens Berman Sobol Shapiro, LLP (“Hagens Berman”), recently  announced the filing of a class-action securities lawsuit against Zillow, Inc. (NASDAQ:Z) (“Zillow”) on behalf of a proposed class of investors who purchased Zillow stock during the period from Feb. 15, 2012, to Nov. 6, 2012 (the “Class Period”), inclusive.
    Shareholders who purchased or otherwise acquired Zillow common stock during the Class Period are encouraged to contact Hagens Berman attorney Karl Barth at 206-623-7292 or to contact the Hagens Berman legal team through e-mail at Zillow@hbsslaw.com to discuss their legal rights. Investors can also contact Mr. Barth by visiting www.hb-securities.com/cases/Zillow.
    Investors who wish to serve as lead plaintiff in the case must move the court no later than Jan. 28, 2013. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Class members need not seek to become a lead plaintiff in order to share in any possible recovery.
    Hagens Berman’s lawsuit, filed Nov. 29, 2012, in the United States District Court for the Western District of Washington, alleges that Zillow and certain of its officers violated the Securities Exchange Act of 1934.
    On Nov. 5, 2012, Zillow announced its third quarter, 2012, financial results and reduced guidance for the fourth quarter and the full 2012 year. On the news, Zillow’s stock price fell nearly 18 percent, closing at $28.15 per share.
    The complaint alleges that the defendants issued false and misleading statements to investors during the Class Period, causing the company’s stock to trade at an artificially high level. It claims the company misled investors regarding issues the company was having in signing up new real estate agents as subscribers, among other issues.
    The complaint further alleges that company insiders sold 3.1 million shares of Zillow stock for nearly $115 million while the stock traded at an artificially high price.
    The plaintiff in the case seeks to recover damages on behalf of the class and is represented by Hagens Berman Sobol Shapiro, LLP. Hagens Berman is a nationwide investor-protection law firm, with many years of experience prosecuting investor class actions and actions involving financial fraud.
    For more information about Hagens Berman Sobol Shapiro, LLP, or to review a copy of the complaint filed in this action, visit www.hb-securities.com/cases/Zillow.

Officials Target Civil Business Opportunity Cases

   (USDOJ) - 11/15/2012 - The Justice Department announced on Nov. 15 the filing of several criminal and civil business opportunity fraud cases, initiated as part of a joint sweep with the Federal Trade Commission and several states. Business opportunity fraud schemes take advantage of people looking for work by luring them in with false promises of big profits and leaving them worse off than they started. The cases include criminal charges against 14 individuals and civil cases against three businesses. The criminal and civil cases announced today are part of a series of investigations named “Operation Lost Opportunity.”
    The Justice Department’s cases are part of the efforts of the President’s Financial Fraud Enforcement Task Force and are being handled by the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Attorney’s Offices for the Central District of California, the Southern District of California, the Southern District of Florida, the District of Oregon, the Western District of North Carolina, the Western District of Pennsylvania and the Southern District of Texas.
    Seven different business opportunity schemes are the targets of the Justice Department’s actions.   According to the charging documents, the criminal schemes involved placement of advertisements online and in newspapers that touted the profits that could be earned by purchasing a business opportunity to own and operate vending machines or display racks.   The United States alleges that the schemes operated as follows:     Salespeople explained that consumers who purchased the opportunity would earn substantial income from the equipment.   According to the sales pitch, the vending machines or display racks would be placed in store locations in the purchaser’s hometown and would offer candy, refreshments or jewelry, depending on which opportunity was being offered.   According to the sales pitch, the purchaser would then receive profits based upon sales from the vending machines or display racks.
    “In an attempt to lure wary consumers, fraudsters have crafted business opportunity schemes that promise what appear to be more realistic returns backed up by false success stories,” said Tony West, Acting Associate Attorney General.   “But we are more determined than ever to bring to justice those who are defrauding Americans out of their time, money, and faith in our economic system – this law enforcement sweep represents a coordinated effort to combat business opportunity fraud on multiple fronts.”
    Enticed by the promise of a “turnkey” business, hundreds of consumers lost millions of dollars purchasing the fraudulent business opportunities targeted in this sweep.   The four businesses involved in the criminal component of the sweep include the following:  

·          Mark Five Inc., a Houston company that promoted a jewelry business opportunity.   O n November 12, 2012 and November 14, 2012, the Department of Justice filed criminal informations charging Billie Joyce Sanders and Michael Cupina in connection with their conduct at Mark Five.   Each defendant was charged with conspiracy, which carries a maximum prison term of five years.   According to the charging documents, Mark Five salespeople referred potential business opportunity buyers to Sanders and Cupina, who falsely claimed to own and operate successful jewelry display racks.   One other individual was previously charged in connection with Mark Five.   In February 2012, a grand jury in Houston indicted Mark Five principal Robert King on charges of conspiracy to commit mail and wire fraud, and substantive mail and wire fraud.   King’s trial is scheduled for February 2013.
·          The Lauren Jewelry Collection, an Atascocita, Texas, company that promoted a jewelry business opportunity.   On November 13, 2012, the Department of Justice filed a criminal information in the Southern District of Texas charging Regina Rush in connection with the Lauren Jewelry Collection.   Rush was charged with one count of conspiracy, which carries a maximum prison term of five years.   According to the charging document, Rush served as the proprietor of the firm and made false representations about the success of distributors and the authenticity of references.   The charges state that Rush encouraged potential purchasers to call references who made false statements about their experiences with the Lauren Jewelry Collection.
·          American Vending Systems (AVS), a Colorado company that promoted energy candy business opportunities.   On November 14, 2012, the Department of Justice filed a criminal information in the Western District of Pennsylvania charging Pearl Pastilock in connection with her conduct at AVS.   Pastilock was charged with one count of conspiracy, which carries a maximum prison term of five years.   According to the charging document, AVS salespeople referred potential buyers to Pastilock, who falsely claimed to own and operate successful energy candy vending machines.   Five other individuals were previously charged for their conduct at AVS and related firms.   Richard Black, Gary Luckner, Lou Gubitosa, Trey Friedmann and Mel Hendricks were all charged and pleaded guilty to conspiracy charges for this conduct.
·          Multivend LLC, dba Vendstar, a New York company that promoted candy vending machine business opportunities.   On Oct. 10, 2012, a grand jury in the Southern District of Florida indicted 10 individuals for misrepresenting a number of facts in connection with the sale of Vendstar business opportunities.   More information about these charges can be found at:  
    The charging documents referred to above contain only accusations against the defendants and are not evidence of guilt.   The defendants should be presumed innocent unless and until proven guilty.
    The civil cases the Justice Department filed allege that three businesses violated the Federal Trade Commission’s Business Opportunity Rule.   The businesses include:
·          The Zaken Corp., also doing business as The Zaken Corporation, QuickSell and QuikSell, (Zaken).   Zaken is alleged to be a Thousand Oaks, Calif., corporation that offers a work-at-home business opportunity.   According to the complaint against Zaken and its corporate officer Tiran Zaken, the defendants offer consumers a business plan to locate and contact businesses with excess inventory to sell.  The complaint alleges that Zaken represents that once purchasers of the opportunity identify businesses interested in selling excess inventory, Zaken will find a buyer for the inventory and give the purchaser a “finder’s fee” equal to half of the total sales price.   Among other allegations, the complaint filed by the Justice Department alleges that Zaken makes unsubstantiated claims, including that purchasers “can make thousands of dollars monthly for working just 2 to 4 hours a week from home.”   This case was filed in the U.S. District Court for the Central District of California.
·          Christopher Andrew Sterling, doing business as Sterling Visa, Rebate Data Processors and Credit Card Workers.   Sterling is alleged to have run several work-at-home schemes from Southern California.  According to the complaint, Sterling represents that purchasers of his opportunity will make a substantial income by “processing” applications for product rebates or credit card applications. Among other allegations, the government’s civil complaint alleges that Sterling failed to make required disclosures under the FTC’s Business Opportunity Rule and made unsubstantiated earnings claims.   This case was filed in the U.S. District Court for the Southern District of California.
·          Smart Tools LLC, a Tualatin, Ore., company.   The complaint against Smart Tools and its corporate officer, Kirstin Hegg, alleges that the defendants have marketed a work-at-home business opportunity that teaches purchasers to locate people who are eligible for a partial refund of their FHA mortgage loan insurance premium.   According to the complaint, the defendants tell potential buyers that they can charge a fee for information on how to obtain the refund.   The defendants allegedly sent postcards to potential buyers stating that purchasers can earn up to $38,943 per year without stating what, if any, substantiation supports the earnings claim.   Such a claim violates the FTC’s Business Opportunity Rule.   This case was filed in the U.S. District Court for the District of Oregon.

Insurance Executive Indicted for Insider Trading

   DENVER – 11/2/2012 - Insurance executive Michael Van Gilder, age 45, of Denver, was indicted by a federal grand jury in Denver on five counts of insider trading, U.S. Attorney for the District of Colorado John Walsh and FBI Denver Special Agent in Charge James Yacone announced.
   The case is being prosecuted in conjunction with the U.S. Attorney’s Office for the Southern District of New York. The U.S. Securities and Exchange Commission (SEC), which has filed a complaint charging Van Gilder with civil insider trading violations, conducted a parallel civil investigation and substantially contributed to the criminal investigation of the case as well. The defendant allegedly traded based on inside information regarding a Denver oil and natural gas company called Delta Petroleum Corp. Van Gilder surrendered to the FBI this morning at the U.S. Marshals’ Office, and will appear in U.S. District Court in Denver this afternoon for an initial appearance.
   According to the indictment, Van Gilder was the CEO and a member of the board of directors of Van Gilder Insurance Company, an insurance business owned by the defendant’s family. Van Gilder was a close personal friend of an executive at Delta Petroleum. Delta Petroleum was a Denver-based oil and gas exploration and development company whose core area of operations was in the Gulf Coast and Rocky Mountain regions. The company’s stock was traded on NASDAQ under the ticker symbol “DPTR.” Van Gilder at times arranged for and provided insurance policies covering certain of Delta’s business operations.
   From Nov. 5, 2007, and continuing until at least Jan. 9, 2008, Van Gilder allegedly committed securities fraud by trading in securities based on material, non-public information.
   Specifically, on Nov. 8, 2007, Delta publicly announced and filed with the SEC a quarterly report disclosing its operational performance, revenues, earnings and other financial performance for its quarterly period which ended Sept. 30, 2007. Three days prior to the disclosure, the financial publication Barron’s disseminated an article entitled “Day of Reckoning” focusing on Delta, expressing pessimism about the company and its stock. Following the publication of the article, the price of Delta’s common stock dropped $1.49 per share. Van Gilder was, at the time, a shareholder of Delta and held shares of its common stock and long-term call options to purchase Delta common stock in a brokerage account with Merrill Lynch and Company.
   The Barron’s article was brought to Van Gilder’s attention. Based on the article, Van Gilder called his stockbroker and asked whether he should sell his shares of Delta. Later that day, Van Gilder spoke with a Delta executive. According to the indictment’s allegations, the executive conveyed to Van Gilder that Delta planned on announcing figures in its third quarter financial report that would not miss its third quarter forecasts and projections for its financial and operational performance, a first in a number of quarters that Delta would meet its projected numbers. At the time Van Gilder received this information, the financial and operational performance had not yet been publicly released and was not generally known to the investing public.
   Based on this confidential material, Van Gilder decided not to sell his Delta investment but instead instructed his stockbroker to buy more Delta common stock on his behalf. As a result, the stockbroker purchased an additional 1,250 shares of Delta common stock at $15.55 per share. Several hours after he purchased the additional stock, Van Gilder emailed two friends and told them that the Barron’s article was “bogus” and that they should buy Delta stock because Delta “will hit their numbers.” In the Nov. 8, 2007, third quarter results Delta disclosed earnings and other financial figures that were in line with or exceeding previous forecasts and predictions of its performance for the quarter.
   In late November 2007, discussions also began for Delta to get a large cash infusion from a privately held investment company called Tracinda, owned by California resident Kirk Kerkorian, through a large equity investment by Tracinda in the oil and gas company. The indictment alleges that the Delta executive shared confidential information about the possible investment with Van Gilder, and that, on Nov. 26, 2007, following a series of calls and other communications, Van Gilder contacted his stockbroker and purchased an additional 1,750 shares of Delta common stock at $13.87 and $13.88 per share.
   As the indictment further relates, the Delta executive continued to share information about the confidential discussions about the contemplated Tracinda equity investment in Delta with defendant Van Gilder, as the confidential discussions progressed over the course of early December 2007. As result, according to the indictment, on Dec. 8, 2007, Van Gilder, in turn, emailed his stockbroker to advise him that he “wanted to purchase as much Delta stock as possible” and two days later arranged through the stockbroker to purchase an additional 4,000 shares of Delta common stock at $17.64 per share. Within minutes of execution of these purchases, Van Gilder spoke by phone with a family member, who, several minutes later, instructed his own stockbroker to purchase Delta common stock.
   On Dec. 17, 2007, the Delta executive advised its board of directors of his discussions with Tracinda. The board authorized the executive to proceed with negotiations with Tracinda. That evening, the executive exchanged a series of text messages with the defendant regarding the board’s decision. Several hours later, Van Gilder directed that $40,000 be wire transferred from a bank account to his Merrill Lynch brokerage account.
   On Dec. 19, 2007, a representative of Tracinda contacted the Delta executive and made an offer for Tracinda to purchase a one-third interest in Delta through a purchase of Delta’s common stock at $17 per share. At the time, Delta’s stock was trading at approximately $14.65 per share. Tracinda’s overture remained confidential. Van Gilder, knowing about the overture, purchased 200 call options, entitling him to purchase up to 20,000 shares of Delta common stock at $20 per share. Delta continued negotiations with Tracinda, and on Dec. 22, 2007, Tracinda agreed to increase its stock purchase to $19 per share. The indictment alleges that in a series of calls Van Gilder was informed of the progress of the confidential negotiations. Immediately following one of these conversations between Van Gilder and the Delta executive, Van Gilder sent an email to two of his family members, with the subject line entitled “Xmas present.” In the email, he advised the family members to purchase Delta stock because “something significant will happen in the next 2-4 weeks.”
   On Dec. 24, 2007, Van Gilder, through his stockbroker, purchased 3,000 more shares of Delta common stock at prices ranging between $15.63 and $15.65 per share, and 90 more call options to purchase up to 9,000 additional shares at $20 per share. On Dec. 28, 2007, during the course of working to finalize the Tracinda stock purchase, the Delta executive exchanged a series of cell phone text messages with Van Gilder. As a result, Van Gilder caused $272,212 from a bank account to be wire transferred into his Merrill Lynch brokerage account. The following day Van Gilder emailed his stockbroker, requesting the broker to “get it on Delta asap.”
   On Dec. 29, 2007, Delta’s board of directors approved a finalized stock purchase agreement for Tracinda to purchase approximately 35 percent of Delta’s common stock for $19 per share. On Monday, Dec. 31, 2007, before the commencement of NASDAQ’s regular trading hours, Delta and Tracinda issued a press release announcing the stock purchase agreement. Within an hour of the commencement of regular trading hours that day, Van Gilder’s stockbroker purchased an additional 4,000 shares of Delta common stock at prices ranging from $19.28 to $19.33 per share, and 114 additional call options. By the close of regular hours trading that day, Delta’s common stock price had risen $3.34 from its previous close of $15.51. Over the course of the next three trading days, Delta’s stock price continued to rise, closing at $22.82 per share by Jan. 4, 2008. On Jan. 9, 2008, Van Gilder sold the 290 call options that he had purchased between Dec. 19 and Dec. 24, 2007, realizing a profit of approximately $86,100 on the transaction.
   The indictment charges Van Gilder with five counts of securities fraud, reflecting five transactions between Nov. 6, 2007 and Dec. 24, 2007 where Van Gilder purchased Delta common stock based on confidential insider information. If convicted on all counts, the defendant faces up to 100 years in federal prison, and up to $25 million in fines.
   “Trading on inside information undercuts the fairness and transparency of our financial markets,” said U.S. Attorney Walsh. “This case demonstrates that in the highly networked world we now live in, insider trading knows no geographic boundaries. This office, and U.S. Attorney’s Offices around the country, will continue to target insider trading wherever it may occur. Thanks to the hard work of this office, the U.S. Attorney’s Office in the Southern District of New York, the SEC and the FBI, a Denver insurance executive has been charged for profiting using confidential information.”
   Thr case was investigated by the FBI, New York and Denver Divisions, with the assistance of and working with the SEC.
   Van Gilder is being prosecuted by Assistant U.S. Attorney Ken Harmon and Special Assistant U.S. Attorney Michael Levy from the Southern District of New York.
   The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

The Arms Debate

Not All American's Have the Right to Bear Arms

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