SEC Fraud

Summary: According to the Press Release dated August 13, 2001, the lawsuit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The complaint further alleges that E-Loan, Inc. and certain of its officers and directors violated the federal securities laws by issuing and selling E-Loan common stock pursuant to the initial public offering without disclosing to investors that at least one of the lead underwriters and two of the other underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the E-Loan offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and laddering scheme discussed above.

According to a Press Release dated November 29, 2001, the complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about August 13, 1999, Quest commenced an initial public offering of 4,400,000 of its shares of common stock at an offering price of $14 per share (the Quest IPO). In connection therewith, Quest filed a registration statement, which incorporated a prospectus (the Prospectus), with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriters allocated to those investors material portions of the restricted number of Quest shares issued in connection with the Quest IPO; and (ii) the Underwriters had entered into agreements with customers whereby the Underwriters agreed to allocate Quest shares to those customers in the Quest IPO in exchange for which the customers agreed to purchase additional Quest shares in the aftermarket at pre-determined prices.