U.S. District Judge Lewis A. Kaplan of the Southern District of New York has dismissed a securities class action lawsuit against Optionable Inc., the company announced.
The lawsuit alleged that Optionable executives made false and misleading statements about the company’s revenues, the quality of its brokerage services and other matters. According to the company, Judge Kaplan Kaplan dismissed the case on Monday.
In an opinion on Sept. 15, the court wrote that “Many of plaintiffs’ factual allegations are not based on an adequate source or are unsupported by the purported source.” The Lower Hudson Journal News reports that
The case was one of several class-action suits that investors filed against the company after Optionable’s biggest customer, Bank of Montreal, suspended trading through Optionable’s brokerage services in May 2007. That decision came after the Canadian bank reported a pretax loss of up to $406 million from trades in natural gas contracts. Suspension of Bank of Montreal’s business was a blow to Optionable because the client accounted for a major part of Optionable’s business.
Optionable got more bad publicity when it was disclosed that former Chief Executive Officer Kevin P. Cassidy had previously been in federal prison for tax evasion and credit card fraud.
As investors reacted to the setbacks, Optionable’s shares plunged 97 percent in a matter of months. The shares rose 4 cents yesterday to close at 8 cents.
