On September 25, 2002, the SEC obtained permanent injunctions and other relief against John Giesecke, Jr., Joeseph J. Shew, and John Desimone in connection with their fraudulent scheme to inflate Hometore's online advertising revenues. The SEC alleged that the defendants caused Homestore to overstate its advertising revenues by $46 million or 64 percent for the first three quarters of 2001. The defendants have pled guilty to related criminal charges. For more information about the SEC's action, you can read Litigation Release No. 17745 (Sept. 25, 2002).
As part of the SEC settlement, the defendants will disgorge approximately $4.6 million, and Giesecke will pay a $360,000 civil penalty. The SEC is seeking to have the penalty included in the disgorgement fund for the benefit of Homestore shareholders. The defendants are required to pay these amounts over the next year into the registry of the Court.
The funds will eventually be escrowed to the law firm of Cotchett, Pitre, Simon & McCarthy, who has been appointed by the Court as the Lead Counsel for the class action involving Homestore. The Lead Plaintiff in that litigation is the California State Teachers' Retirement System (CalSTRS). With the approval of the Court, these funds will be disbursed to the defrauded shareholders of Homestore who are covered by the class action.
You can find more information at the Homestore class action settlement information website. If you have further inquiries, you can contact Nancy Fineman or Mark Grafilo at (650) 697-6000, or by contacting Therese Krenz at Rust Consulting, Inc., the Claims Administrator, at (507) 333-4384 or firstname.lastname@example.org.