SECURITIES FRAUD
 

Securities Class Action Suit Filed Against
Actrade Financial Technologies, Ltd.

On February 15, 2002, the firm of Shapiro Haber & Urmy LLP filed a securities class action suit entitled Richard Bowe Roth-IRA v. Actrade Financial Technologies, Ltd., 02cv1263 RMB, alleging securities fraud in the United States District Court for the Southern District of New York against Actrade Financial Technologies, Ltd. ("Actrade" or the "Company") (NASDAQ: ACRT), and certain of its officers and directors.

The class consists of all persons who purchased Actrade common stock during the period March 11, 1999 through July 17, 2002, inclusive (the "Class Period").

The complaint alleges that the defendants violated section 10(b) of the Securities Exchange Act of 1934 ("the Exchange Act"), and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act, by issuing a series of press releases and public filings containing materially false or misleading statements representing that the Company provided short-term loans to businesses to finance commercial transactions. The complaint alleges that these statements were false and misleading because defendants knew, or recklessly disregarded, that the Company had also loaned millions of dollars to individuals for non-commercial purposes, defrauded its sureties into providing coverage for these loans, and had overstated its financial results based on these fraudulent lending practices. The complaint further alleges that defendants' actions artificially inflated the price of Actrade common stock during the Class Period.

Case Status: Settled for $9.9 million subject to Bankruptcy Court and United States District Court Southern District of New York approval.