eTrade 2000 Annual Report Download - page 34

Arlington, Virginia, and leases a facility in Portland, Oregon. Our asset gathering and other operating segment leases facilities in San
Francisco and surrounding cities in California. The leases expire at various dates through 2025.
ITEM 3. LEGAL AND ADMINISTRATIVE PROCEEDINGS
On November 21, 1997, a putative class action was filed in the Superior Court of California, County of SantaClara, by Larry R.
Cooper on behalf of himself and other similarly situated individuals. The action alleges, among other things, that our advertising, other
communications and business practices regarding our commission rates and our ability to timely execute and confirm transactions
through our online brokerage services were false and deceptive. The action seeks injunctive relief enjoining the purported deceptive
and unfair practices alleged in the action and also seeks unspecified compensatory and punitive damages, as well as attorney fees. On
June 1, 1999, the Court entered an order denying plaintiffs’ motion for class certification. On January 25, 2000, the court ordered
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plaintiffs to submit all claims seeking monetary relief to arbitration and stayed all other claims pending the outcome of arbitration. A
motion to modify that order was denied on July 13, 2000. We are unable to predict the ultimate outcome of this proceeding.
On February 11, 1999, a putative class action was filed in the Supreme Court of New York, County of NewYork, by Evan Berger, on
behalf of himself and other similarly situated individuals. The action alleges, among other things, that our advertising, other
communications and business practices regarding our ability to timely execute and confirm transactions through our online brokerage
services were false and deceptive. Plaintiff seeks unspecified damages based on causes of action for breach of contract and violation of
New York consumer protection statutes. By a Decision and Order, entered March 28, 2000, the Court ordered plaintiff to proceed to
arbitration on his breach of contract claim and granted our motion to dismiss plaintiff’ s consumer protection claims. Although plaintiff
has not filed for arbitration to date, we are unable to predict the ultimate outcome of this proceeding.
On March 1, 1999, a putative class action was filed in the Court of Common Pleas, Cuyahoga County, Ohio, by Truc Q. Hoang. The
Hoang complaint seeks unspecified damages and injunctive relief arising out of, among other things, plaintiff’ s alleged problems
accessing her account and placing orders. Plaintiff alleges causes of action for breach of contract, breach of fiduciary duty, unjust
enrichment, fraud, unfair and deceptive trade practices, negligence/intentional tort. On September 1, 1999, the Court of Common Pleas
denied our motion to compel arbitration and we appealed. By a Journal Entry and Opinion, dated March 16, 2000, the Court of
Appeals reversed the Court of Common Pleas’ decision and remanded this case to the Court of Common Pleas on the grounds that the
Court of Common Pleas’ resolution of our motion to compel arbitration could not be determined until it first determined whether this
case should be certified as a class action. On June 16, 2000, we filed a “Motion to Dismiss for Lack of Subject Matter Jurisdiction” to
which we anticipate plaintiff will be responding in the near future. On September 29, 2000, Plaintiff filed her First Amended
Complaint, and Motion for Class Certification. We are unable to predict at this time, the ultimate outcome of this proceeding.
On March 10, 1999, a putative class action was filed in the Superior Court of California, County of SantaClara, by Raj Chadha. The
Chadha complaint seeks unspecified damages and injunctive relief arising out of, among other things, February 3, 4, and 5, 1999,
system interruptions. Plaintiff brings causes of action for breach of fiduciary duty, violations of the Consumer Legal Remedies Act,
and violations of the California Unfair Business Practices Act. On July 29, 1999, the Court granted our petition to compel arbitration
and stayed all further proceedings. We are unable to predict the ultimate outcome of this proceeding.
On March 11, 1999, a putative class action was filed in the Superior Court of California, County of SantaClara, by Elie Wurtman. The
Wurtman complaint seeks unspecified damages and injunctive relief arising out of, among other things, plaintiff’ s alleged problems
accessing her account and placing orders. The complaint also makes allegations regarding access problems relating to our customers
residing or traveling outside of the United States. Plaintiff brings causes of action for negligence and violations of the Consumer Legal
Remedies Act and California Unfair Business Practices Act. On September 23, 1999, the Superior Court denied our motion to compel
arbitration. We filed an appeal in October 1999, and all briefing and arguments on that appeal have now been completed. We are
unable to predict the ultimate outcome of this proceeding.
On April 14, 1999, a putative class action was filed in the Superior Court of California, County of LosAngeles, by Matthew J.
Rosenberg. Plaintiff seeks injunctive relief based on alleged violations of the California Unfair Business Practices Act regarding the
extent to which shares in IPOs were made available to our customers. On October 6, 1999, the Superior Court dismissed plaintiff’ s
class action claims with prejudice but granted plaintiff leave to amend his claim for injunctive relief. Plaintiff filed an amended
complaint on October 26, 1999, and we subsequently filed a petition to compel arbitration that was granted on December 29, 1999. On
February 29, 2000, plaintiff filed a notice of appeal, and the Court of Appeal for the State of California, Second Appellate District,
dismissed plaintiff’ s appeal on July 20, 2000. We are unable to predict the ultimate outcome of this proceeding.
We believe the foregoing claims are without merit and intend to defend against them vigorously. An unfavorable outcome in any
matters which are not covered by insurance could have a material adverse effect on our business, financial condition and results of
2002. EDGAR Online, Inc.