TouchStone Agrees to Settle Suits Filed by Shareholders
HUNTINGTON BEACH — TouchStone Software Corp. said it has agreed to settle three shareholder class action suits filed against the company after its stock price tumbled last year.
The company said it has agreed to establish a settlement fund consisting of $500,000 in cash and 200,000 newly issued shares of the company’s common stock. The price of the stock will be determined when the shares are issued, said Ron Maas, TouchStone’s chief financial officer.
The cash and stock in the fund will then be distributed to investors who purchased TouchStone shares from May 2, 1995, when the company began trading on the Nasdaq SmallCap market, to Dec. 21, 1995, when TouchStone disclosed that it expected disappointing sales for the fourth quarter.
The shareholder suits, filed earlier this year in U.S. District Court in Santa Ana, accused insiders of enriching themselves and defrauding investors as part of a stock offering last year.
TouchStone makes computer diagnostic software, and its stock soared when the company introduced a product designed to help computer users install Windows 95, the operating system unveiled by Microsoft Corp. in August.
The stock peaked at $17.625 a share, but it tumbled later in the year when the company revealed that sales of its Win ’95 Advisor were below expectations.
TouchStone’s stock closed at $4.125 a share Thursday, up 12.5 cents.
Company officials admitted no wrongdoing. In a written statement, company President Larry Jordan said TouchStone agreed to settle the suits because “it was in the best interests of the company and its shareholders to resolve the litigation in view of the inherent uncertainties of complex litigation and avoid the continued unnecessary distraction.â€
