. ,,:.' ,..,...1 . • , , • fi;"Iii • - t • • . "'"" '.... :,,,,., i.) 1 Aland-I-Tr, STODDARD, WARNICK& ALBRIG-HT 4' ,..4 O. i .il '. ' • . . — 2, -.."' * , G. MARK ALBRIGHT, ESQ.' 2 Nevada Bar.No. 001394 • ' W '41 IVA 'S1 , • OE 'j ' ' • 801 S. Rancho Thrive, Suite D-4 • . :, 1 1.; :: ,,C; 'A 3 Las Vegas, NV 89106 L''''' '.(.,.,,;;, n•kr, • (702) 384-'7111 • . . 4 Attorneys for Plaintiffs wf • 5 . , • • UNITED STATES DI.F,TTrr'r.ff3Lt:7•':' •,',7.' . - • .. . . .. 6 : . • DISTRICT 01' ,7 ''•;'....V..8,.....D..i'l.'1. . , . „ . , 7 • . •4. . . ROB' GROSSMAN, On. Behalf Of Himself ..'" 4V -6 t-41. 17. i IN P.Mo :41W.i. . 6 And All Others Similarly Situated, ' . . .„ : ' . . .. . . • * • ...... .9 Plaintiff,' • CLASS ACTION COIVIPIAINT • : • FOR :VIOLATIONS OF TUE 1.0 . • v. ' f3E/RAL. SECURITIES LAWS ' • • • c.D . i. x x 11 ANCHOR GAMING, STANLEY E. ',.FULTON, : . • ' • .GEOFFREY A SAGE; ELIZABETH FULTON : 'Elaktiff Dpinands a Dial . 12 JONES STUART D. BEATH, GARRET A. • .: by Juv • .t . _. SCHOLZ__, MICHAEL B. FULtON MICHAEL b. • 13 RUMBOLZ, and GLEN j. 'TETT:1240ER, ..'. glail 14 • : . December 4, 1997 . : 1014 . Defendants, . , • . . . . , . .' . . . . illi r ; 1.5 • ., • . . . . . • • A 0- PrE3 16 . Ail allegations made in this complaint are based on, information and belief; except those . 0 , t • 17 allegations that pertain to the named plaintiff' and his counsel, which are based on persona C.D ' 5 18 knowledge. Plaktifes information and belief is based, inter dm, ' on the kivestigation made by and Z ' 19 throngh his attomeyS. . . . 20 JER71K1,MAAT_YEnt . • ' 21 1. This Court has juriScliction over the subject matter of this action under Section 22' • 22 of the Securities Act of 1933 (the "Sectuities Act"), 15 U.S. p: § 77v, The 'claims alleged herein . . 23 arise un.der.Sections 1.1, 12(a)(2), and 15 of the Securities Act, 15 U.S.C. §§ 77k, 771(a)(2), and • 24 77 0, . . • . . . , , • 25 2. Venue is Proper in this Disttict pursuant to . Section 22 ofthe Securities Act, 15 .26 U,S. C. § 77v and 28 U.S.C, §§ 1391(b) and 1391(c). Many of the acts and transactions giving , 27 rise to the violations of law *complained of herein., including the preparation and disseminaticm to , 2 8 the public of a materially false . and misleacling registration. statement and prospectus, occurred in. . . . , ••. . .• . • . , . , . • , . . . • i
Transcript
. ,,:.',..,...1 . •, ,
• fi;"Iii• - t • • . "'"" '.... :,,,,., i.)1 Aland-I-Tr, STODDARD, WARNICK& ALBRIG-HT 4',..4 O. i .il '. ' • . .—2, -.."' * , G. MARK ALBRIGHT, ESQ.'
.9 Plaintiff,' • CLASS ACTION COIVIPIAINT• : • FOR:VIOLATIONS OF TUE
1.0 . • v. ' f3E/RAL. SECURITIES LAWS ' • •• c.D. i.xx 11 ANCHOR GAMING, STANLEY E. ',.FULTON, : . •
' •.GEOFFREY A SAGE; ELIZABETH FULTON : 'Elaktiff Dpinands a Dial .
12 JONES STUART D. BEATH, GARRET A. • .: by Juv •.t ._. SCHOLZ__, MICHAEL B. FULtON MICHAEL b.
• 13 RUMBOLZ, and GLEN j. 'TETT:1240ER, ..'.glail
14 •
: . December 4, 1997 .
: 1014 . Defendants, . , •
. . .. ,
. .' . .. .illi r; 1.5 • ., •
. . ..
. ••A 0-
PrE3 16 . Ail allegations made in this complaint are based on, information and belief; except those .0 ,t •
17 allegations that pertain to the named plaintiff' and his counsel, which are based on personaC.D '
5 18 knowledge. Plaktifes information and belief is based, inter dm,' on the kivestigation made by and
Z ' 19 throngh his attomeyS. .. .
20 JER71K1,MAAT_YEnt . •
' 21 1. This Court has juriScliction over the subject matter of this action under Section 22'
• 22 of the Securities Act of 1933 (the "Sectuities Act"), 15 U.S. p: § 77v, The 'claims alleged herein .
. 23 arise un.der.Sections 1.1, 12(a)(2), and 15 of the Securities Act, 15 U.S.C. §§ 77k, 771(a)(2), and •
24 770,. . •.. .,
, • 25 2. Venue is Proper in this Disttict pursuant to . Section 22 ofthe Securities Act, 15
.26 U,S. C. § 77v and 28 U.S.C, §§ 1391(b) and 1391(c). Many of the acts and transactions giving,
27 rise to the violations of law *complained of herein., including the preparation and disseminaticm to
, 2 8 the public of a materially false . and misleacling registration. statement and prospectus, occurred in.
.
.
. ,••.
.
.•
.
• .
, .
, . •
, . .. •i
. ,•- -„• .
•
• 1 this District, In addition, at all time relevant hereto, defendant Anchor Gaming ("Anchor" or the
• 2 "Company") maintained its•printipal executive offi.ces in this District at 815 Pilot Road, Suite 0,
3 Las Vegas, Nevada, 8911,9. •
4 3. In connection -With the wrongful acts'and conduct alleged herein, the defendants,
5 directly and indirettly, used the means and instrumentalities of interstate commerce, including the
, 6 United States mail and the fa.cilities of a•national securities market.
. XBETAKM.5• • •
8 4. O. October 14, 1997, plaintiff Robin Grossman. purchased 500 shares of Anchor
. • 9 common stock in the Company's secondary public offering, a.s defined below, pursuant to the
registration statement and prospectus filed with the •SEC in connection with said second aiy public,
offering, at a price of $91 per share, and suffered damages as a result of the violations of the
2 federal securities laws alleged herein. •
•6 ,d. t 13 . 5. Defendant Anchor is primarily engaged in the business of developing and operatingP•1;IE
0'124
§1 R ., 14 gaming machines and gambling casinos through the develop:dent Of garnbling oriented businesses.
ir g 15• Specifically, the Company has developed. a variety of proprietary gaming machines, which it both4 ;41 . F.4 • .
16 uses in its own garo' ing operations, and markets to casinos unaffiliated with the Company. AnchorE,4
17 plates these machines in gambling venues pursuant t6 short-term. anangements, at 'zip cost to the •
18 casino, which generally provide for royalty or revenue sharing payments to the Company based
• 19 upon usage. • •
20' • • . 6. At all time releVant hereto, defendant Stanley E. Fulton ("Fulton.") was Chairman,
21 of the BoardofDirectors (the "Board''), Chief Executive Officer, and acting Chief Financial
. 22 Officer of the Company. Defendant Fulton also was the largest shareholder of the Company at all.
23 relevant times herein, exercising ownership or control, over nearly 6.9 niillionshares, or
• . 24 approximately 52.4% of the Anchor common stock issued and outstanding as of October 13.,
2 5 1997. For Anchor's fiscal year ended June 30, 1997 ("Fiscal 1.997"), •def'endant Fulton received
26 cash compensation. from the Company of $345,000, During the Class Period, however, as defined
2 7 in paragraph 1.6, below, defendant Fulton sold 1,73 million shares of Ancilior common stock •
• 28 •
• 2• •
•• v, •:.,• ' .6..,.... ., . ., . .
• ' .
1 piirsuant to a secondary public offering, as defined in paragraph 30, below, at a pi-ice of $91 per
. 2 share: As a result of this sale, which constituted more than 25% of his. holdings of Anchor .
3 common. stock immediately prior to the comme-n.cement.of the Class Period, defendant Fulton
. , 4 realized proceeds, before underwriting pcimmissioias and discounts, in excess of $157 million:
. . 5 7. At all times relevant hereto, defendant Michael, B. Fulton ("Michael. Fulton"), the
" .. . 6 son. of d,efen.dant Fulton., was a member of the Board of the Company. Defendant Michael Fulton .
1 . . 7 also was one of the largest shareholders of the Company at all, relevant times herein., with
8 ownership of 495,300 shares, or approximately 3.8% of the Anchor. common stock issued and,,
• 9 outstanding as of October 13, 1997, pursuant to an irrevocable voting proxy in favor of his father,
. '. . 10 defendant Fulton. During the Class Period, as dared in paragraph 16, below, defendant Michael •' rt
i 11 Rilton sold 195,300 shares of Anchor common, stock pursuant to a secondary public offering, as
. 12 defined in paragraph 30, below, at a price of $91 per share. As a result of this sale, whichAt
d 18 "1 13 constituted nearly 40% . of his. holdings of Anchor common stock immediately prior to the1
, 6 1 2 . 14 commencement of the Class Period, Michael Fulton. realized proceeds, before underwriting . ..
15 commissions' and discounts, ofnearly $18 million. . . •o 0'.Prg16 . • 8. At all times relevant hereto, defendant Elizabeth Fulton Jones ("Jones"), the •0 4
GO
• E'; • ' 17 daughter of defendant Fulton, was a member of the Board of the Company. Defendant Jones also• PI
C., . .,
16 wa.s one of the largest sh.arth.olders of the Company at a;II relevant times herein, with ownership of..„o1.9 502,500 shares, or approximately 3.8% of the Anchor common stock issUed and outstanding as of
• * 20 October 13, 1997,, pursuant to an irrevocable voting proxy in favor of her father, defendant .
21 Fulton. During the Class Period, as defined in paragraph 16, below, defendant .Tones sold
. .22 202,500 shares of Anchor common stock pursuant to a secondary public ofcring, as deBned in
23 . paragraph 30, below, at a price of $91 per share, As a result of this sale, which. constituted More
. . 24 than 40% of her holdings of Anchor common stock immediately prior to the commencement of
25 the Class Period, defendant Jones realized proceeds, before tatderwriting commissions and
. 26 discounts, in excess of $18. million... ..27 . . .
. . ..
28. .- .' .. . .3 •
. .
. . . .. .
. ... .
. . .________............ . •
. . _ _ _ _ _ ...,.. • , .... !,
. .. !
9. At all times relevant hereto, defendant Michael D. Runcibolz ('Rumbolz") was !!.. 1
s. 2 President and Chief Operating Officer of the Company, as well aS a memberof its Board. During. , 3 Fiscal, 1997, defendant Rumbolz received oath compensation from the Company of $460,000, .
• 4 along with options tø purchase 200,000 shares of Anchor common stoek with .a. *value in excess of ..1
5 $5 n3illion. . .. , . . 1.6. • 10. . Ai all times relevant hereto, defendant Stuart a . 0eath ("Beath") was a member of -
7 the Eoard of the Company. During the Gass Period, as defined in. paragraph 16, below, .
. 8 defendant Beath sold, 2,000 shares of Anchor . cortnnon stock in an open market transaction, at
9 • prices ranging from $82.88 to $83.00, for proceeds in excess of $165,700.
e-, 10 11. At all times relevant hereto, defendant Geoffrey A. Sage ("Sage") was Corporate0:14 .g .11- Controller of the Company. During Fiscal 1997, defendant Sage received cash compensation. ,r4 .
• 12 from the Company of approximately $104,000. During the Class Period, as defined in paragraph• ots,E. • '14 13 16 below defendant Sage sold 2,500 shares of 'Anchor cOramon stock, or 100% of his total . .
i"hl, P
.1:1 j10? 14 Anchor cornthon stock holdings, at a price of $85.00 per share, for proceeds of $212,500.t 11/g ',,',
15 . . 12. At all times relevant hereto, defendants Oarret A: Scholz ("Scholz"), and Gle-n I. .
, Rri3 *•o-4 16 HettiLiger ("Hettinger") were Members of tJae Board. of the Company. .,, .
t'* 17 15. Each of -the defendants named in, paragraphs 6 through 12, above (collectively, the
u!
I 8 "Indivi.dual Defendants"), participated in the drafting, preparation, and/or approval of various .al19 false and misleading Statements contained in the registration statement arid prospectus fled by the
20 Company with the SEC in. connection with the secondary public offering ofAnchor eommOn
. 21 . stock, as defined in Paragraph 30, below, as complained &herein.. because of their Board .
22 merniberships, executive and managerial, positions, and/or extensive holdings of Anchor commOn
23 stock each of the Individual Defendants was responsible for enstting the ttuth and accuracy of .
24 . the various statements contained in the * Company's registration statement and prospectus in
25 connection with the secondary public offering, . .
• 26 14. Each of the Individual Defendants had a duty to disseminate promptly accuide amid
,
27 truthful. information with respect to the Company and to correct promptly any previously. .
• 2 8 . • , .. . .. . 4 . . .. .
.. • • .
. . .,
,
_____
--- , .....•• - , .,.......,. .. .
. • .• . .• 1 disseminated false or misleading infomiation.. As a result of their failure to do so with. respect to .
, 2 the preparation and 'filing of the Company's registration statement and prosp. eetus with the SEC in•,,, • 3 connection With the secondary offering of the Company's common stock, as complained of .,,
. 4 . herein, the market price of Anchor cotoià on. stOck was artificially inflated, causing injury to the
' • 5 members of the Class.
, 6. .. . • 15, The.Individual Defendants, because of their management positions, membership. on. •
1 7 the Board of Anchor and/or their extensive ownership of Anchor common stock had the power. • 8 and influence to direct the management and activities of Anchor and its employees, and to cause
9 Anchor to engage in the unlawful conduct complained of herein. Accordingly, the Individual •, .
10 Defendants were able to, and did, control the contents of the registration statement and .•50
• 11 prospectus complained of herein that Anchor filed with the SEC during .the Class Period, as
; • 12 defined in paragraph. 16, belOw. Each sn.ch defendant wa:s provided with copies of the registration
4 1 i 13 statement and prospectus alleged herein to be misleading prior to or •shortly after it issuance and .
6 R O I A: 14 had the ability and opportunity to prevent its issuance or cause it to be corrected.t v i' ° • 14 1, F3 i I p o15
I cidAS5. ACTION ALLE.QAILONS,n 3.0
16oq ' * 16.. Plaintiff brings this action on his CnV),.behalf and as a class action pursuant to RuleE. , •.4
17 23(a) and Rule 23(b)(3) of the Federal gules of Civil Procedure on behalf Of a class (the "Class")0i 18 of persons who purchased or acquired Anchor .common stock pursuant to the registration
19 statement and prospectus filed with the SEC% connection with. the Company's secondary public
. 20 offering of common stock, which was declared effective on or about October 14, 1997 (the "Class . .
. 21 Period"). Excluded from, the Class are the defendants herein, members of the immediate family of
. . 22 each of the Individual Defendants, officers and/or directors of the corporate defendant, any,
23 person, B1111, trust, corporation, officer, director or other individual or entitY in which any
24 defendant has a controlling interest or which is related to or affiliated with. any of the defendants,,
. .,
' •25 and the legal representatives, agents, affiliates, b.eirs, successors-in-interest or assigns of any such•, .
26 excluded party. • • . . '
. .
. 27 •. •
28 . . .• .r
.a
. . .
. •.
.
. .
------ '
•
• I
17. 'The Class is so numerous that joinder .of all members is impracticable. At least :1„8
• 2 million shares of Anchor common. stock were issued pursuant to the company's secondary public •
• 3 offeting, as defined in paragraph 30, below. It is believed that hundreds of persons purchased
• 4 Anchor 00112M0)1. stock pursuant to the secondary offering during the Class . Period, rendering
5 joinder of all such purchasers impracticable.
• • . 6 . •18. Plaintiff's. claims are tyPical of the elaimg of the members of the Class. Plaintiff
• 7 an.d all naerribers of the Class sustained damages as a. result of the wrongfulconduct complain.ed. of
8 herein,•
9 . 19. PlaintilYWill fairly and adequately protect the interests of the members of the Class
?,+ 10 and has retained counsel competent and experien.ced in class and securities litigation. Plaintiff has
•5 11 no interests that 'are contrary to or in, conflict with those of the members of the Class plaintiff
12 Seeks to represent. • •
„13. .
20. A class action is superior to other available .m.ethods for the fair and efficientPaZigg: • 14 adjudication. of this controversy. Because the damages suffered. by individual Class members may
14'4t ibi`" g g 15 be relatively ,small, the expense and burden of individual litigation make it virtually. impossible for
16 the plaintiff Class members individually to 'seek redress for the -wrongful conduct alleged. •
• 17 21. Common. qUestions oflaw aid fact exist asto all members of the Class and;••4 .18 predominate over any .questions solely affecting individual members of the Class. Among the
• 19 questions of law and fact common to the Class :are:
20.• (a) whether Sections 11, 12(a)(2), and 15 of the Securities Act were •violated by defendants' acts as alleged herein;
21 •
• (b) whether the registration statement 'and prospectus that Anchor filed with22 the SEC in connection with its secondary 'offering of common stack
contained misstatements of material faa or Grated to state material facts
23 necessary in order to make the statements made, in light of the•circumstances under which they were made, not misleading;
24(c) whether the market price of Anchor common stock during the Class Period
• 23 was artificially inflated due to the non-disclosures and/or misstatements• .• complained of herein; and
26• (d) whether the members of the Class have sustained damages and, if
27 so, the appropriate measure thereof.•
28
••
6
'
•
•
• • •
1 22. Plaintifflm,ows of no difficulty that will be en,countered in the management of this
. 2 litigation that would preclude its maintenance as a class action.•
. 3 23. The names and a.ddresses of the record owners of Anchor conirtion.stock
' 4 purchased during the Class Period pursuant to the secondary offexing are available fix= the
Company's transfer agent(s). Notice can be provided to such record owners via fi.rst,el.a.ss mail
6 using techni.queS and a form of notice similar to those customarily used in class . actions.
7 • FAcnigALLE_GATIOINE •
8 • 24. .Anchor is a diversified gaining company whose business includes• the operation of
§. two major casinos in Colorado, as well as the development and marketing of earning machines for
10 use in, its own gaming operations and in casinos unaffiliated with the COmpany. Anchor became .aE@i
11 publicly-held entity pursuant to an. initial public offering of 2.75 million shares of common stook,
12 . at a price of $12 per share, which, was completed in February 1994. .Since becoming a publiely.
p p . 13 held entity, the Company' S revenues and earnings have increased Substantially, along with th.e
14 market price ofits common stock. Indeed, between its fiscal year ended lime 30; 1994, (unseal
g 1 5 1994) and Fiscal 1997, Anchor's revenues increased by over 281%, from $54.769 million toOtPM g
16 $153 . 74 million, while net income increased by approximately 409%, ftom $8.719 million, or
17 $1.03 per share, to $35,676 million, or $2.61 per share. During the same time period, the market
18 price of Anchor common. stock increased substantially above its $14 per share initial offering4 'price, closing at $69 per share on July 31, 1997 -- the day the Company announced its financial
20 results for Fiscal 1997.
21 25.. Much, of Anchors growth dtuing the past three years is attributable to its .
22 increased, emphasis upon the proprietary gamed aspect of its business. Specifically, proprietary
2 games consist of gaming machines that either have been, developed by the Company, or which
24 Anch,dt has acquired the exclusive rights to market to' u-n.affiliated casinos, As detailed in the
28 Candpany? s filings with the SEC during the Class . Peliod, Anchor's proprietary games are. .
2 g ' designed to provide casinos with a higher win per machine than their existing gaining devices,
27 while also implementing various unique concepts and devices desigtted to increase customer
28 * • •
7•
•• J. •,
•
. . .playing levels. Anchor installs these games in unaffiliated casinos free of charge pursuant to
2 various royalty, revenue participation and. similar agreements, thereby allowing the casino to
3 avoid the substantial costs associated with. the purchase . or installation of these gaming machines.
4 Thus, successful placernent of its proprietary gaming devices ensures significant recurring .
5 revenues to Anchor through royalty payments and similar sources.
• 6 •26. , Revenues frointhe pla.ceinent of proprietary games has comprised au. increasingly
7 Sigdificant portion of Anchor's business since the Company began mar.keting these machines to *
8 unaffiliated casinos in Febniary 1993. Indeed, while proprietarY games aceounted for•
9 . approximately $4 million, or 7.5% of Fiscal 1994 revenues, within three years this segment of •
. 1 0.
Anchor's business had grown to nearly $0 million, or nearly one-third of Fiscal 1997 total
1
.
,04 revenues, making it the fastest growing segtnent within the Company,
. 12 27. Much of the growth, Of Anchor's proprietary games business is attributable to the
13 Company's entry, in. or about September 1996 4 into a strategic alliance with International Gamer,q111"A 14 Technology. ("IGT") -- the largest manufaeturer of coMputerized gaming casino products --
P4414°L.1 0•• a 15 designed to enhance the Company's ability to develop and distribute proprietary gaining devices.
16 Among other things, this strategic alliance has resulted in the formation of a joint venture between
• -.4‘ 17 Anchor and IGT (the "Joint Venture"), to develop, integrate and distribute wide area pragressim
1 8 . ("WAP") proprietary game systems, which allow the Company to link individual ,41.0t machines
• 9• 'electronically among multiple locations, with an machines sharing .a. common jackpot.
20 . Since entering into the Joint Venture, Anchor's revenues from its proprietary
21 gaming d.evicesh.ave more than doubled, growing from $21,.457 million for the fiscal year ended
22 June 30,1.996 ("Fiscal. 1996"), to $49.716 million for Fiscal . 1.997. Investment analysts have
• 23 reacted enthusiastically to the rapid growth of this segment of Anchor's business, based primarily
24, upon the purported success of the WAP proprietary gim.e systems flowing from the Joint
25 Venture. For example, on or about July 31, 1997 the same day on which Anchor =Minced •
• 26 record financial results for Fiscal 1997 -- the investment firm. of Deutsche Morgan. Grenfell, Inc. .
27 ,
28
8• •
•
. • • •
(Deutsche Morgan"), issued' an analyst report recommending the purchase of Anchor common
2 stock, based priniatily upon the success of the ,Toint Venture: . . .3 Driving ealnings this quarter, was the success of its Wheel of Gold game and the emerging •
. dominance .of Wheel of Fortune, the progressive joint venture With IOT 4•
We expect that going forward, the Wheel. of Fortune should continue to drive earnings .5 .
because of the strength of the Company's proprietary games, we have raised our6 • estimates for Fiscal 1998 , •
7 , .29. Other investment analysts also recommended the purchase of Anchor common
8 stock based primarily Upon the strength. of its proprietaty gaming operations, and the puipozted
9 success of the Joint Venture. On or about August 7, 1997, the investment in of Ladenburg,
• 10 Thalmann, & Co, Irtc. ("Ladenburg"), issued an analyst report in which it issued ai "buy"'rating On •
the Company's common stock, based upon the continued growth ofopetions flowing from the
12 joint Venture:
13. 'Oa July 31., Anchor Gaming reported results for the fourth quarter and
g,131g . .1996 fi.sca1 year ended Tune 30, once again beating analysts estimates. . . •
14 •
111, The numbers reflect the ongoing consistent pezformance of the Central •
g 15 Station Casino . . and the continued dramatic success' of Wheel ofGold2 well as the newly introduced Wheel of Fortune game, a. joint venture
, 16 between. Anchor and IGT. . Growth shotild continue well into the firsthalf of the year as those machines contribute greatly to the overall
E4` 17 profttability of the Proprioary Games Division. . .
• 18 . Similarly, on or about August 22, 1997, The Las,Vegas Itaie_v_v-Journal reported that, •
-19 according to analyst David Ehlers of Las Vegas Investment Advisors Inc., 'Anchor was
• 20' his mm's favorite stock in the gaming industry." Specifically, Ehlers focused upon the
, 21 puzported success of the Joint Venture in issuing his recommendation, noting that
• 22 "Anchor's Wheel of Fortune slot machine joint venture -with IIGT:1 _ . is causing a 'player
23 feeding frenzy", along with "the Anchor-IGT installation of a [WAP] for the Totem Pole
24 slot machine and Anchor's Cash Ball slot machine!' Following the issuance of these
25 favorable reports, the price ofAnch.or common stock rose ,.c,ignificantly, cliosing at a recOrd
2 6 high of $80 per share 033. August 29, 1997.
27
28
• 9
• • •
, , . ,„ • . ,:... . . •. !
. .1 , 30, During this time period, certain of the Individual. Defendants decided to .
• .2 . take advantage of the riiing price of Anchor common stock by selling a substantial portion .
3 of their equity stake in the Company to the public. Specifically, on. Septellibey 2, 1997, .
4 Anchor announced that defendant Fulton., along with. his wife and six children, would sell • •
5 1.8 million shares of the Company's common. stock, or approximately 30% of their. .. 6 combined equity stake in .Anchor, in a secondary public offering expected to close in . .
7 October 1997 (the "Secondary Offering"). Although the price of the Company's
8 common stock dropped significantly follo-vving this atm.ounceme-nt, defendants acted
9 quicklYto stem this decline, thereby ensuring that the investing public would not interpret
10 . these signifl.cant insider sales of stock to :reflect a lack of confidence in the Company's .c. 11 financial prospects, while guaranteeing the generation of substantial Proceeds fiom the.; 12 Secondaty Offering. Indeed, on September 10, 1997 -- apProximately one week after the.t
tl • '''• 13 antimincement of the SecOndary Offering — the CbrnPany issued. a press release .4 i ra l 1 •
1 .
14 . . announcing that, "based on preliminary internal financial reports for the months of July .i . 4 4 0 .,:,
15 and August, it believes that analysts' estimates for the current quarter's profits [ended.
al ,,,p g P16 September 30, 1997] may be conservative." Further, the Company speciScally attributed
t . '17' these results to the success of the Joint Venture, which purportedly Installed
21 . ..-.
18 approximately 2,700 of the highly successful 'Wheel. of Fortunemathines as of August 30, .
1 .19 1097." • ..
.
. .... . •
20 • 31. Attehor's aimouncement had the desired effect, driving the price of the
•• 21 Company's.common stock to close at a new record high, of $90.50 per share on..
22 September 18, 1997, approximately 'one week after the issuance efts earnings forecast. .
23 Indeed, la,loornberg New S0.33.7ice reported on September 10, 1997, that . "Anchor's stock .
24 has doubled so fir this year, driven, mainly by growth of its proprietary games."
. 2.5 Bloord_berg faith.er reported that Deutsche Morgan analyst James Murren had raised his
26 earnings estimates for the Company based upon the suOcess of the products galena-0cl by
27 ....
28 •.
• • .
• 10 •
. .• . .
. .
- -„ • .\• • -- •
•
1 the Joint Venture, noting that Ilhey've proven that if a product is different than the mass
• 2 product . out there, people will be attracted to it and play longer„
3 32. As the price of Anchor common stock continued to rise prior to the
4. commencement of the Secon.dary Offering, defendants failed to disclose 'various aciver,se
5 facts that were having a material adver ge impact on the financial remits of the Joint
Venture and, consequently, on the Company as a whole, For example, prior to the
7 Secondary Offering, defendants failed to disclose that Anchor had becorr.te embroiled in. a
8 &spate with a significant third-parry vendor to the Joint Venture concerting gaming .
9 comunission fees and that, based upon this dispute, the Company already had incurred
, 10 substantial liabilities that required Anch.or to record a material charge to its purported
11 record earnings results. Even more significantly, defendants fRiled to disclose that the
12 operating results of the Mint Venture had begun to decline significantly, based upon •1.4
13 seasonality patterns found in. certain other segments of Anchor's business.ZIIN!
' 14 33. Rath.er than disclose these adverse material. facts, the Company relied upon. .
bA15 the purported strength of its operations in general, and the operations of the joint Venture
PlAlS 16 in particular, to proceed with the Secondary Offering. Specifically, on or about •
17 October 14, 1997, the SEC declared effective a registration statement and prospectus (theN
. 8 "SPO . Prospeetus"), purguant to which defendant Fulton, along with various members of
, 19 his immediate family, sold 1.8 million shares of Anch.or . common stock to the public at a
. . . 20 price of $91 per share, realizing Proceeds from. these sales before underwriting discounts.
21 mid commissions of $1.63.8 million. The SPO Prospectus was signed by each of the
22 Individual Defe-n.dants.
. 23 34. The SPO Prospectus.contained substantial assurances regarding the
24 strength of the Company's business operations. Specifically, the SPO prospectus not only
25 included Anchor's audited financial result's for Fiscal 1997, which had, achieved record.
2 .6 levels, but also noted its unaudited results for its quarter ended September 30, .1997,
27 ended merely two weeks before the commencement of the Secondary Offerkg. Although
28 ••
11,
•
) •
•. . : . •
, the Company did not include fozmal.financial statements for the September 30 quarter, the
2 SPO Prospectus noted that net income increased 103% to $16.7 million, revenues
3 increased 55.% to $54.5 million, and earnings per share increased. 105% to $1.23."
4 35. The SPO Prospectus also Stressed the continued sticcess ,tif the Joint .•
5 Venture, which accounted. for a significant portion of Anchor's rapid growth, as revealed
6 iii the following description of the Company's relationship. with IGT:
. 7 . In September 1996,, the Company entered into a strategic alliance with IGTto enhance the Company's ability to develop and distribute proprietary
8 games, Through this strategic alliance the Company and IGT have formedthe "Joint. Venture] to . develop., integrate, and distiibute proprietary gang)
9 concepts on a WAP system. .• The Company's revenues from proprietarygames totaled $49.7 million fortPiscal, 1997], an increase of approxiinately
1 0 132% over [Fiscal 1996].c.D
the Company, seeking to capitalize on its established sales and marketing •infrattracture its extensive base of existing casino customers, and its
12 licemes.in virinally all major domestic gaming jurisdictions,' has been'. •• d4actively developing proprietary gaines . . The Company's proprietary
p1•4‘•= 13 games are desigied 'to increase gaming customer play levels by eitherZgg4! enticing the customer to play longer or to wager more coins per play. TheEi 411 A: 14 ' Cordp any believes that a significant opportunity exists tra further expand
and develop the market for proprietary games distributed on a participation15 basis.
4WPr40 '7" 18 36. Defendants further touted the Joint Venture, and the strategic.alliance
17 between Anchor and IGrT, as a means to increase the profitability of its proprietary games •1 ro
18 business, as detailed in the SPO Prospectus: . .I =I
19 The Company believes that the Strategio Alliance will facilitate both theexpansion, of their proprietary games business and the Company's ability to •
2 P develop and distribute additional proprietar . games on. a WAP. . .
21 The Company belieVes the Strategic Alliance Will enhance the profitability • •of games developed by the Company in the future through either an •
22 expansion of the [Joint Venture] or similar joint venture agreements withIGT, or both. „
23 •31. The SPO P'rovectus did not disclose, however, that the operations of the .
24.Joint Venture were subject to material seasonal variations, and that these variations
25already had begun to negatively impact Anchor's operating results at the time of the •
26 .27 Secondary Offering. To the contrary, the SPO Prospectus assured readers that the
' Company's operations were only marginally affected by seasonality, and exclusivelywith
2 8
12 •
• •, • ,
••1 respect to its casinos located in the mountains of Colorado, as set forth under the heading •
• 2 "Seasonality,....•
3 . The Company's operations as a whole are not subject to significantseasonal variations. IloWever, in general, thebighost level of business •
4 activity at its Colorado casinos occur during the tourist season from July toOctober of each year....
• 5
38. The SPO Prospectus also failed to reveal that, at the time of the Secondary.. 6 •
Offering, Anchor was embroiled in a. signifi.cant dispute with a -vendor to the Joint Venture• 7 ,
and that, as a result of this dispute, the Company was required to record a charge to•• •
• earnings that would have a material adverse impact on its fmancial results. Indeed, under9
•• a section entitled "Litigation", the SPO Prospectus warranted that Anchor was not• 10
involved in any disputes that would have a material a.dverse impact on the Company: .1 1
• From time to time the Company is a defendant in various lawsuits ii•12 routine matters incidental to its business. Management defres not believe
that the outcome of any such litigation will have a material effeet on •61 13 Anchor.
11 1° 1
„Lo 14 Defendants repeated these assurances in a footnote to the Company's financial statements140':-
'A 15 for Fiscal 1997, incorporated in the SPO Prospectus, under the heading "Commitments , •-0 8 0 .. A01=111te c' - 4 16 and Contingencies", which also failed to reveal the .existence of any dispute that,could
E•4' 17 have a material adverse impact on Anchors results of operations. Indeed, the SPO •
• • 18 Prospectus failed. to reveal any adverse facts negatively impacting the joint Venture at the .
the that defendants commenced the Secondary Offering. • •
20 .39. The trading price of Anchor common stock remained at high levels •••
. • 21 folio "wing the completion of the Secondary Offering, despite certain of the Individual
22 Defendants' liquidation of more than $160 million of their equity stake in the Company,•
23 due largely to defendants' failure to disclose the various adverse facts discussed above.•
24 Indeed, on or about October 15, 1997-- immediately following the Secondary Offering --. .•
• • 25 the investment firrn, of BT Alex Brown ("Alex Bro-wn"), issued an analyst report strongly
26 recommending the purchase of Anchor common stock, based largely upon the continued
.27 strength of the proprietary games marketed through the Joint Venture: • •28 •. . •
13 ••
• •
) •••• •
•We are reiterating our "strong buy" investment rating on Anchor Gainingstock
.2 •We believe that Anchor's proprietary games segment -MU' be the main,
3 driver of earnings going forward. This segthent has transfortned Anchor• . Gaming from a well-balanced casino/route operator and games maker into4 a technology company that has become the premier content provider for
the hardware of the gaming industry: slot machines. . .
• 40, With. the market price of Anchor common stock remaining at near record •... 6
levels, and the material a.dv.erse facts with respect to the seasonality of the Joint Venture's. 7
business and its significant dispute with a vendor still concealed, certain of the Individual
. Defendants who had not participated in. the Secondary Offering also decided to sell a.9
substantial portion of their equity stake in the Company., Specifieally, on.October 21, .10
•11
1997, merely one week after the' Secondary Offering, defendant Beath sold 1,300 share's
5 of Anchor common stock at a pri.ce of $82.88 . per sh.are; and an a.dditional 700 shares at a.1 2
41. • price of $83 per share, therebyreducing his equity stake in the Company by nearly 1.5%Ud 13
O Z 1 41 exchange for proceeds of $165,844. Thereafter, on October 200.997, defendant Sage14
N sold 2,500 shares of Anchor coinmon stock, representing his entire equity stake in the
15 Company, at a price of $85 per share, realizing proceeds of $212,500,04 16
4 L . On or about November 12, 1997, Anchor filed its Form 10-Q for theE4` 17 •
. (Fluter ended Septerriber 30, 1997, with the SEC, which confirmed the quarterly18
• 19
operating results noted in the SPO Prospectus. As in the SPO Prospectus, the Form 10-Q
failed to disclose the adverse seasonality patterns negatively impacting the Joint Venture20
and the Company's results of operations, •nor did it disclose the material liability arising21
2
from Anchor's dispute with a vendor to the joint Venture. Instead, the Company noted2
the growth in proprietary games revenue as a percentage of total. ievonue during the23
preceding twelve months, which, Anchor attributed "primarily to the commencement of the24
•2
Company's joint 'venture with IGT during the second half of Fiscal 1997 and, to a lesser5
2 extent, growth in revenue from the Company's proprietary game Wheel of Gold which
6
27 began generating revenue in, the third quarter of Fiscal 1996", The Form 10-Q was signed
by defendants Fulton and Sage.28 • •
•14
• •
. • •
••
,.. .. ., . .. .
•. 1 . 42. On, December 3, 1997 -- less than two months after the Secon.d.aty Offering•
, • .• 2 and the Individual Defendants' sale of more than $163 Million in Anchor common stock to„
. ., .3 the public -- the Company publicly revealed for the flrst time the nature and, extent of the,
. 4 problems facing.the joint Venture at the time that the SPO Prospectus was declared .•
. 5 effective. Specifically, Anchor revealed That the Joint Venture '',tnay be experiencing•
1 • 6 seasonality in its results of operations, which, could, affect earnings of the. (Joint Venture], .. . . .
R'
7 and of Anchor:" The Company further 'revealed for the flmit time that it would record a.
8 purportedly "unforeseeable one-time charge resulting from an unresolved, matter with a
, 9 third party vendor to the [Joint Venture], whieh will be reflected in Anob.or's current .. .
III •10 quarter results." B ased.up on these facts and poor weather experienced tit its Colorado
;-, •• 11 • casinos, Anchor's press release concluded that "it is likely that earnings for the quarter._ „ ,pe • . • .
7 P. 12 ending December 31, 1997 may not meet analysts' expectations . . . 2p.,1d5 g 13 43. . The Company did not provide any explanation for it inability tb foresee
14 th.e necessity of recording a matdrkil charge to earnings based upon a legal. dispute with:a1 .
.,4'1,1 • 15 vendor, *nor .diei it explain why the existence of this dispute had not been disclosed, in the' e..,C=1.1 tr;
5".7 ,'.1
16 SPO Prospectus.. Defendants also did not provide an explanationfor the absence of any . .'
prior disclosure concerning the seasonality of the business of the Joint Venture, which also • ,1
• • • 1•6 was having a material •a.dverse impact on Anchor's financial results at the tilli g that the . ..
; . 19 SPO Prospectus was declared effectiVe. Nevertheless, as reported by Bloomberg News•
20 Service on December 3, 1997, defendantFulion admitted that none of these adverse facts•.
• 21 were disclosed at the time of the Secondary Offering, or at anytime thereafter prior to
23 Most ofthe Company!s reasons for its possible earnings shortfall were, tohis ImoWiedge, not disclosed to analysts or investors prior to today's . • , .
24 announcement, Fulton. said. The only detail that was previously cliSclosed.Was the possibility that Colorado's well-publicized blizzards would hirt .
„ 25 business at Anchor Gaming'S Colorado . . . casinos. • •
26 . 44.. The price of Anchor common stock plummeted; following the Company's
• 27 revelations. On December 4, 1997 -- the first day of trading follovving . Arich.or's adverse, 28 . . . ' •. . .
15 •. .. ., .i . . . . .
•• .
••
. announcement -- the price of the Company's OOMMOI). Stock closed, at $52.50 per share,
• 2 signifying a decline of mere than 42% from the price at whiCh certain of th.e Individual
3 Defendants sold their shares ofAnchor common stock to the publie in the Secondary
4 Offering. • •
• 5 010DLI
. Against AR Defendants •ForViolations Of
7 • Sjcton U_OLThC kekurilialkel
8 45. Plaintiff repeats and realleges each of the allegations set .Thrth in, the
9 foregoingparagraphs, as if fully . set forth herein. This Count is brought pursuant to
10 .• Section 11 of the Securities Act, 15 11,S.C. § 77k, on behalf of the Class„ against all,r.D
J. 1 defendants: •
. 12 . 46. The SPO Prospectus was inaccurate and misleading, contained untrue
s6 13 statements of material facts, and omitted to state other factsneeeSSary to Make the* •
1 .00 14 Statem.entg. contained therein not miSleading. Specifically, the SPO Prosp •eetus omitted
'ir,1 15 material information that rendered many of the statements made in the prospectus, iii lightpArgl 1 Of the circumstances under which they were made, materially misleading. Th,ese material
17 , omissions included, the following: •
18 (a) The hi/mg to disclose that, at the time the SPO Prospectus was
19 issued, tiled with the SEC, and deelared effective, the Joint Venture was embroiled in a
20' dispute with an important vendor concerning gaining commissions on slot tn.a.chines placed
21 in casinos by the Joint 'Venture, which exposed the Company to a material liability and
'22 which. would ulthrtate13'r require the Company to tab a. charge against its earnings, thereby
23 significantly impacting on the Company's profitability and operating results; and
24 (b) The failure to disclose that, at the time the SPO Prospectus was
25 issued, filed with the SEC, and declared .efrective, the Joint Venture Was everiencing a
2(5 significant seasonal slowdown in business, and that the seasonal slowdoWn in business•
27. would Continue throughout the quarter ending December 31, 197.
28•
16•
I • . . ./
47.' The Company is the registrant for the Anchor shares of COM/11,0:11 stock sold.
2 in the Secondary Offering. As issuer of these shares of common stock, Anehor is liable to
3 plaintiffs and the Class for the miistatements and OtEliS4011E4 contained in the SPO
• . 4 . Prospectus under Section 11 of the Secutities Act • •
5 48. Each of the Individual Defendants O) signed the registration statement .
- 6 accompanying the •PO Prospectus; and/or (ii) was a director of Anchor at the time that1 •
7 the registration statethent accompanying the SPO Prospectus was filed with the SEC,
8 Further, none of the Individual Defendants made a reasonable investigation or possessed
9 reasonable grounds for the belief that the statements contained in. the SPO Prospectus
pc* 10 were true and devoid of any omissions of material fa.ci. Therefore, each of the Individual, 5 .• •
. 11 Defendants is liable to plaititif and the Members of the Class for the various misstatements
12 and. ()Missions contained in the SPO Prospectus under Section 11 of the Securities Act.
13 49. Plaintiff and the members of the Class purchased Anchor common stock •.
4,1 4p,E1 14 pursuant to the SPO Prospectus. At the time they purchased the Company's common
I
rA 15 stOci, plaintiff and the members. of the Class were without knowledge of the facts •
a '76 r-4 con.cerning the ina,ocura.te and misleading statements and omissions alleged herein.. . .
. 17 . 50. ' Plaintiff and the members of the class have sustained substantial damage as
, 5 • 18 a direct and proximate result of defendants' misconduct and violations of the Securities • • .
19 Act. . ••
20. COUNT ILI•. 21 Against Defendants Fulton Michael Fulton and Jones For
yjoiptions of tip ,12(a)(2) . QLTh&Securities.t22
2351_ Plaintiff repeats and realleges each of the allegations set forth in the . .
24 foregoing paragraphs, as if fully set forth herein. This Count is brought pursuant to
25 Section 12(a)(2) of the Securities Act on behalf of all. purchasers of Anchor common stock
. • •pursu.ant
26to theSPO :Prospectus, •
2752. By means of the SPO Prospectus; d:efendants Fulton, Michael Fulton and
28 Jones sold shares of the Company's common stock to plaintiff and the Members of the
•17
•
- '.)
• •
1 , Class in return for proceeds of approximately $125 million. These d,efettclants' acts of .
• 2 solicitation consisted primarily of the preparation and dissemination. of the SPO
3 Prospectus, as well as preparation and/or participation in presentations to investment
4: analystS in the form of conference calls, .directmeetingS, and "roadshovv" presentations.
• 5 5. The SPO Prosp.ectus contained untrue statements of material facts, and
. 6 * concealed and failed to disclose material facts,. as detailed above. Defendants Fulton,
7 Michael Fulton and Jones owed plaintiff and the other members of the class the duty to •
• 8 make a. reasonable and diligent investigation of the . statements contained in the SP°
. 9 Prospectus to ensure that such statements were true and that there was rto omission to
10 state a material fact required to be stated in order to make the statements contained •
. 11 therein not misleading. Defendants Fulton, Michael Fulton and Jones, in the 'exercise. of
• 12 . reasonable care, should have known. of the misstatements and omissions contained in the01(
SPO Prospectus as ,,,aet forth above.‘,2114:All
14 ' 54. Plaintiff does not know, nor in the exercise of reasonable 'ante:nee could, •
15 have known, of the untruths and omissions contained in the SPO Prospectus at the time• iggP
PA 4 2 16 they acquired the CoMpany's common stock.
17 55. By reason of the conduct alleged herein, Anchor violated Section. 12(a.)(2)
f • 18 of the Securities Act. As a direct and proximate result of such violatiOns, plaintiff and the .
19 Vietabera of the Class sustained substantial damages in connection with their purchase of
20 Anchor common stock. Accordingly, plaintiff and the other members of the Class who .
• • 21 hold Anchor common stock-pursuant to the SPO Prospectus have the right to rescind and •
•• 22 recover the consideratioti paid for their shares, and hereby tender their Shares, and/or notes
23 to the defendants sued herein. Class members who have sold their shares seek damages to
24 the extent permitted by law. • •
26
27 •
• 28
• •18
•
•
l .• . •. .
-
• 1
• 2 Against The Individual Defendants. for Violations.0f.
3 Seetion.,15QMp_auntbluALet . •
4 * 56. Plaintiffrepeats and realleges each of the allegations set forth in the
5 * • foregoing paragraphs, as if fully set forth here, This Count is brought pursuant to Section
, • 6 15 of the Sociales Act on behalf of all, purchasers of Anchor common stock pursuant to
7 the .SPO Prospectus. • •• 8 57. Each of th.e Individual Defendants was a controlling person of the
9 Company Within the meaning of Section 15 of the Securities Act during the Class Period.
10 At the tittle the SPO Prospectus was filed with the SEC and declared effective, each of the •
' 11 IndiVidual Deft:adults had th.e •power and authority to cause the .Company to engage in the
' 12 wrongful con,thict,Complained of herein by reason of the following:.
•6 13 (a) Defendant Fulton had the power and auth.orityto cause Anchor to
c?,g4 14 engage in the wrongful conduct complained of herein b3'T vittue of;hiS position as Chairman,et4,
F 't.l1 15 of the Board, Chief Executive Officer and acting Chief Financial Officer, as well as his •
16 o-wnership or control over 6.9 million shares of the Company's ' common s of October 13,• .
17 1997; •
18 . (b) Defendant Michael Fulton had the power and authority to cause
• 19 Anchor to engage in. the -wrongfud conduct complained of herein by virtue of his position
20 as a member of the Anchor Board, as well as one of the Company's largesit shareholders,
21 with ownership or control over 495,300 shares of Anchor comunin stock as of October
• 22 .13 , 1997;
23 (c) Defendant Jones had the power and authority to cause Anchor to
2 4 engage in the wrongfill conduct complained,. of herein by virtue of her position as a.
. 25 member of the Anchor Board, as well as one of the Company's largest shareholders, with
2 6 ownership or control over 502,500 shares of Anchor common stock as of October 13,*
2', 1997;
. 28 • • •
19
• •
( 77: )
. (d) . Defendant Rumbolz had the power and •anth,ority to cause Anchor
2 to engage in the wrongful conduct complained of herein by virtue of his poSition
3. President and Chief Operating Of6.cor of the Company;
4 , (e) Defendant Sage had. the power and authority to cause Anchor to •
5 , engage in the wrongful conduct complained of herein by virtue of his position. as
6 Corporate Controller of the Company; and
7 .(f) Defendants Beath, •Scholz and Hettinger had the power and.
8 authority to cause Anchor to engage in the wrongful conduct complained of herein by
9 virtue of their position as members of the Anchor Board.
E-1 10 58.. None of the Individ.ual Defendants made a reasonable investigation or .
• • 1 1. possessed reasonable grounds for the belief that the statements contained. in the SPO •„p •. 2 Prospectus were true and devoid of any omissions of material fact. Therefore, by reason
gp ;1 1 z of their positions of control over the Company, as alleged herein, each of the Individual
e 14 Defendants is liable jointly and severally with and to the same extent that Anchor is liable
I s 15 to. plaintiffs and the Members of the Class ai a.•result of the wrongful conduct alleged
16 herein. •Ca)
• 17 , JUDILRELTil • .
c.D18 • WHEREFORE, plainta on his ovvn behalf and on. behalf of the Class, prays for
1 9 judgment as follows:
20 A. Declaring this action, to be a. class action properly maintainable pursuant to
21 Rule 23(a) and Rule 23(b)(3) 'of the Federal Rules of Civil Procedure on behalf of the
22 Class, and declaring plaintiff fo be a proper.Class representative; •
23 B. • Awarding plaintiff and the other Members of the Class rescissory and/or
24 compeniatory damages as a result of the wrongs complained of herein;
2 5 C. Awarding plaintiff and the other members of the Class their costs and•
, 26 up. eines of this litigation, including reasonable attorneys' and experts' witness fees and
27 other costs and disbursements; and
28
20. .
.,
— — - •• 4" . n -- Y, ,,: ' • ,
.
1 ''' _ .. • • '
- • - •.
.
1 .D . Awarding piaintiff awl the other members of the Class such other and
•• 2 ' furth.er relief as the Court tray deernjust and proper.'
1 3 •.
. .• .
. 4 . Plaintiff hereby demands a trial by jury of all issues so triable. .. '. ,, .
5 Dated: December 5, 1997ALBRIGI-IT„ STODDART), WARNICK. ' •
6 . . . & ALBRI rFIT ••
• By . ,do ' . _ ...,_.,_.-,;,„4, , .. 8 Mark G. .s. brigh • /. •
• . .9 ' Quail Par.' X, Suite D-4. .
• 801 Sou „ Rancho Drive .10 • • Las Veg;, NV 89106 .
5 •. • . (702) 384-7111.
1 1 . . • •.fla
Df_Counsgi: • . ..
•.
, •. . 1 ., 2 ' •
4e .Vincent R. Cappucci
, g 1 1 3 Robert S Gans,2 01 • . . • Kevin M; McGee '
.
.•
El E1 14 BER,NSTEIN LITOWUZ BERGER . . . . * •
& GROSSMANN LLP •1 lg Z1 g - 15 • 1285 Avenue of the Americas .
2R v 'i 16 134:1et5Y5 -40t ,-14147 York 10019
. ' • .
..
11 .•
.
' 18 . .. .
; 19.
•' •
. . ..
20 . ••
21• .
. • • . .,• .
•2 2 * . . .
. • 23• .
. .
. 24' • • •. .
25 • • •• •. .
26 • .
•27 • • • . . .• .
• 28 ''• •' .
• . .. • •
\Rommt \inAet .7v1.03.1 , wpn \ in,,,,,, \ a. •
21 .. .1 ., .
'
. (.A‘e
A
1
CERTIFICATION
Robin Grossman (Plaintiff") declares, as to the claimsasserted under the federal securities laws, that:
1. Plaintiff has reviewed the foregoing complaint and'authorized its filing.
2. . Plaintiff did not purchase the security that is thesubject of this action at the direction of plaintiff's counsel or
1 in order to participate in this private action.
1 3. Plaintiff is willing to serve as a representative partyon behalf of the class; including providing testimony atdeposition atd trial, if necessary.
4. Plaintiff' S purchases during the Class Period of AnchorGaming common stock are as follows;
ec tv .nalitagnat,.1.012 aatAcommon Stock Purchased 500 shares 10/14/97
5. During the three years prior to the date of thisCertificate, Plaintiff has never sought to serve or served as arepresentative party for a class in any other action filed underthe federal Securities laws.
6. The Plaintiff will not accept any payment for servingas a representative party on. behalf of the class beyond thePlaintiff's pro rata share of ay recovery, except such
. reasonable costs and expenses (including lost wages) directlyrelating to the representation of the class as ordered orapproved by the court.
declare under penalty of perjury that the foregoing istrue and correct. Executed this Xth day of December, 1997 atNew York, New York.
, . . . • • . . . . . .,. ..• • 1t h if .)944 g ivil tovii,thiC( . .0+11 th.0. •1•Utdtellein O;f • celii;,faelt 7:',u,1 he ., tO0ipar• to iu 'plemeine the illg end snry lee • uf pleadings a .' *
r other oeuert SYS required by 111W, exdept at otovidixt; pi, lodor 1Meg of 001,ff t. Mil fossn, approvers by the JudleiirGuritfterlitei. tri.t 1./ 'tettP9seitel , inSedternbeS 1974; it reOuired for the use Of thn elnrk of Covet for tritourpotn of lulu/sung she c;...,1 clook-t1
.11-1 p..et. (SRC MISTRLIOTIONg ON Tke REV9R59 OP THE F0 It. .' ' '..". •'. • - • ' .• • : '
I (a) PLAINTIFFS 1577 ;DEC .- : i. .: )1 DEFENDANTS . •
