eLitigation

A class action lawsuit has been filed on behalf of people who purchased shares of eConnect, Inc., common stock between November 23, 1999 and March 13, 2000.

eConnect, Inc., of San Pedro, California (www.econnectholdings.com) has a division called Powerclick.com. Powerclick.com is a merchant portal that features more than 200 merchant listings aimed at generating revenues based on fees per click. This suit may be of interest to ISOs because eConnect also has “Internet Cash Payment Portals” which aim to sign up merchants and generate revenues through merchant application, listing, affiliate link, and transaction fees. eConnect is also 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.

The complaint states that during the Class Period defendants made false and misleading statements and/or omissions concerning the financial condition and business prospects of the company, while disregarding information which would have been of material importance to any reasonable shareholder.

The complaint also 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 Web sites;

(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, the disclosure of these and other facts would have caused a severe collapse in the price of the company’s stock and the defendants schemed to conceal these facts in order to artificially inflate eConnect’s stock price.

If you have questions about the case, contact the law offices of Weiss & Yourman at (800) 437-7918 or wyinfo@wyca.com

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