Two more class action stockholder lawsuits have been filed against troubled
online ad operation Hitsgalore.com, one by the Los Angeles
law firm of Stull, Stull & Brody and one by the Bala Cynwyd, PA law firm of
Schiffrin & Barroway LLP.
The complaints name as defendants Hitsgalore and its CEO and president, and
allege that the company knew and failed to disclose that its founder, Dorian
Reed, along with two other individuals, had been ordered to pay over $600,000
to 100 customers for “false claims made by Internet Business Broadcasting, a
failed online advertising company they worked for.”
The Rancho Cucamonga, CA-based company’s stock has tanked since the news
broke last week. The OTC stock closed Tuesday at 4 19/32. It had traded at
more than $20 before Reed resigned last week.
The earlier class action stockholder suit was filed by the Los Angeles firm
of Weiss & Yourman.
Meanwhile, Bloomberg News, which broke the story,
reported that the company “has an investor relations official who cheated
clients as a stockbroker, state documents show.”
The news service said that Frank Pinizzotto, 38, handles investor relations
for the
Internet advertising company from Florida. In 1995, he was the target of a
complaint by the state’s Division of Securities and Investment Banking which
found that as a broker for Lew Lieberbaum & Co. in 1991, he defrauded
customers by selling them shares “at
prices which were neither fair nor reasonable,” Bloomberg said.
He was also found to have made unsuitable recommendations and illegally sold
unregistered securities, according to the Florida administrative complaint.
In 1992, Pinizzotto was suspended for five days by the National Association
of Securities Dealers after being accused of telling a customer he would make
money in a stock because the president of the company would move its shares
higher, Bloomberg said.
Pinizzotto quit as a stockbroker in 1992 after working for seven different
firms over nine years. Asked why he left the stock brokerage industry, he was
quoted as saying: “I have my reasons.”